Key points
- Banks and Blackstone announce $63 billion in chip financing
- Broadcom backs equipment value for senior lenders
- A separate $42 billion commitment could fund Anthropic's rent
Bank of America (BAC), Blackstone (BX), Citi (C), and Morgan Stanley (MS) announced $63 billion in committed financing on October 26 to buy Broadcom (AVGO) AI chips and networking equipment for lease to Anthropic. Broadcom will provide protection against declines in the equipment's value, taking on part of the financing risk.
The release calls that backing "residual value support" and says it equals the senior portion of the debt. It doesn't disclose that portion's size or the conditions under which Broadcom would have to pay.
Anthropic's IPO filing, made public the same day, details its Broadcom leases and a separate commitment by the chipmaker to buy up to $42 billion of Anthropic's convertible notes. Proceeds from those notes could be used only to pay rent on one of the leases.
Broadcom shares closed up 2.3% at $329.17 on October 26. They were already trading above that price when the financing announcement came out at 3:15 p.m. Eastern.
Banks arrange senior debt, while Blackstone backs the junior portion
A company formed for the transaction will buy Broadcom's XPU AI accelerators and networking equipment and lease them to Anthropic. Deliveries are expected to begin in 2027 under a previously announced compute agreement.
XPU is Broadcom's name for its custom AI chips. Anthropic's IPO filing says its Broadcom leases provide computing capacity based on Google's (GOOGL) tensor processing units.
Bank of America, Citi, and Morgan Stanley are arranging the first-lien debt, which has the first claim on the equipment securing it. Blackstone is the sole provider of the committed portion of the second-lien financing, which ranks behind the senior lenders.
The announcement doesn't disclose how the $63 billion is divided. Bloomberg reported in August that Broadcom was in talks to raise more than $60 billion for an AI infrastructure deal. Its October 2 report put the package at $60 billion, with a $42 billion senior portion and an $18 billion junior portion led by Blackstone.
Broadcom's support is sized to the senior debt
The release also doesn't explain how any payment under Broadcom's support would be calculated.
Reuters described the support as effectively guaranteeing the senior lenders against declines in the equipment's value, up to the amount of their debt.
An earlier Broadcom backstop pays out on a lease default
In June, Apollo (APO) led a $35 billion vehicle that buys Broadcom-designed racks and leases them to Anthropic. In its 10-Q for the quarter ended August 2, Broadcom described a backstop on a deal of that shape, without naming the financial partner or the customer.
If the customer defaults on the lease, Broadcom pays the difference between 85% of what's owed and what the racks sell for. Maximum exposure, once all the racks are deployed, was about $29 billion. Broadcom records the backstop as a guarantee and calls its fair value "not material."
The October 26 release doesn't say whether the new support also depends on a lease default.
Anthropic's S-1 puts its Broadcom rent at $161.2 billion
Anthropic signed an equipment lease with Broadcom in March 2026 that Broadcom "intends to assign to a designated financial partner," according to the S-1, which Anthropic filed publicly on October 26. Rent over that five-year lease comes to about $125.2 billion, not counting interest.
Neither side can cancel the lease except in a default. Anthropic put cash into a restricted account for Broadcom's benefit in April.
Across all of its Broadcom leases, Anthropic expects to pay about $161.2 billion in rent. Two Anthropic special purpose subsidiaries signed the leases, and Anthropic guarantees their obligations. The leased equipment secures them, and Anthropic accounts for them as finance leases.
In the second quarter of 2026, Broadcom assigned part of its rights under one of the leases to another third party. The release doesn't say which lease the new vehicle takes on, or whether the $63 billion covers all of it or part of it.
Broadcom's $42 billion note commitment is tied to the March lease
The S-1 also gives the terms of Broadcom's agreement to buy up to $42 billion of Anthropic's convertible notes, which was first tied to Anthropic on October 1. Anthropic can use the proceeds from those notes only to pay quarterly rent on the March lease.
The notes carry 9% annual interest, added to the principal instead of paid in cash, or 13% for notes issued while Anthropic is missing certain revenue conditions. The holder can convert them into Anthropic's nonvoting Class N stock at 90% of the 30-day volume-weighted average price of its Class A shares, or 85% for notes at the higher rate.
Broadcom can assign the agreement to a designated financial partner with Anthropic's consent, which Anthropic can't unreasonably withhold. The notes are secured on a junior basis by the same collateral as the March lease. Anthropic doesn't expect to issue any before its IPO.
The filings don't yet tie the $63 billion to a specific lease
Across these arrangements, Broadcom is the chip supplier, provides collateral-value support, and could lend Anthropic money to pay rent. The disclosures don't yet establish exactly how the new $63 billion vehicle connects to the leases and lending commitment in Anthropic's S-1.
The new financing's first-lien amount, interest rates, and Broadcom's maximum exposure remain undisclosed. The deal is on our AI debt tracker alongside other AI borrowing.
"This validates that there is capital available to finance such growth and that Broadcom is uniquely positioned to enable it," Broadcom CEO Hock Tan said in the release.
