Broadcom reportedly seeking up to $100B in debt financing for AI chip deal
Broadcom Inc. is reportedly seeking to borrow up to $100 billion as part of a new artificial intelligence chip financing deal.
Bloomberg today cited sources as saying that the debt is intended to support the growth efforts of Anthropic PBC and unnamed “other companies.” Those companies may include OpenAI Group PBC. Earlier this year, the ChatGPT developer partnered with Broadcom to develop custom processors.
The chipmaker’s debt financing deal could reportedly include between $60 billion and $70 billion worth of senior notes. Those are loans that the borrower must pay back before its other obligations in the event of a bankruptcy. It’s believed that Broadcom may guarantee a portion of the debt. Additionally, the company could reportedly add about $30 billion worth of junior notes, debt instruments that are only repaid after the borrower offloads all its senior debt.
It’s unclear what AI initiatives Broadcom plans to support with its chip financing deal. However, today’s report did specify that Blackstone and Apollo Global Management are among the investors from which the chipmaker hopes to raise the funds.
In June, the three companies launched an investment vehicle called the AI XPV Platform. It has provided Anthropic with $35 billion in financing to support data center construction initiatives. Those projects are expected to bring more than 1 gigawatts of computing capacity online this year. According to Broadcom, the AI XPV Platform’s longer-term goal is to facilitate more than 20 gigawatts worth of data projects through 2028.
Notably, the infrastructure that the fund will finance will use Broadcom silicon. The company is a major supplier of chips for data center switches. It’s also the world’s top maker of host bus adapters, which are used to connect servers with storage equipment.
AI accelerators have emerged as another major source of revenue for Broadcom. The chipmaker helped Google LLC develop its TPU line of machine learning processors. In April, the companies extended their engineering partnership to 2031. The same month, Google and Broadcom announced plans to provide Anthropic with several gigawatts of TPU computing capacity.
In June, Broadcom and OpenAI debuted a jointly designed inference accelerator called Jalapeño. The ChatGPT developer expects the chip to provide better performance than current graphics processing units. According to OpenAI, the accelerator’s speed is partly the fruit of optimizations designed to reduce data movement.
Broadcom expects to generate more than $100 billion in revenue from AI chips next year. Anthropic will reportedly account for more than 40% of that sum.
Photo: Broadcom
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