Key points
- Supplier financing makes demand harder to assess
- Customer revenue has to catch up with the spending
- Burry's leasing warning fits better than I'd like
When a supplier lends its customer money to buy what it sells, I want to know what happens when that financing runs out. Can the customer generate enough revenue to keep buying and repay the loan? Broadcom (AVGO) and Anthropic raise that question.
Broadcom has agreed to lend Anthropic up to $42 billion, according to Anthropic's IPO prospectus. The money would cover about a third of a $125.2 billion, five-year lease for computing built on tensor processing units, the chips Broadcom designs with Google (GOOGL).
A day later came the report that banks and Blackstone are lining up $60 billion in debt for Broadcom's chip deal, to help fund chips for Anthropic and other companies. We first covered those financing talks in August. The reports don't say how that package relates to the $42 billion loan.
Broadcom would be both Anthropic's supplier and its lender
I'm not saying the deal is a trick. Anthropic is a real customer with a real business, and it's expected to become Broadcom's largest compute customer next year. Broadcom has projected about $115 billion in AI semiconductor revenue in fiscal 2027 and $230 billion in fiscal 2028.
But a sale the seller helps finance isn't the same as a sale the customer pays for with its own money. The loan is a commitment for now, and Anthropic said it doesn't expect to sell any of the notes before its IPO. If Anthropic draws on it, part of that demand would be Broadcom's own balance sheet coming back around. If Anthropic's business keeps growing, nobody will care. If it stumbles, Broadcom would be exposed twice, as a supplier and as a lender.
Anthropic flagged a related risk in its own filing. The prospectus warns that Broadcom's role as both hardware supplier and financing partner creates "potential conflicts of interest" that could affect Anthropic's access to computing power.
Broadcom isn't the first chipmaker to do this. "Nvidia is putting in place a massive amount of its balance sheet, and Broadcom is having to follow suit," Jay Goldberg, an analyst at Seaport Research, told Reuters. We've written about Nvidia's own chip-backed loans, where lenders are asking for bigger guarantees.
Anthropic's revenue has to catch up with its commitments
Financing can keep the buildout moving. What I want to know is whether payments from customers using Claude will eventually cover the costs and support repayment.
Anthropic reported nearly $4.6 billion in revenue for 2025 alongside $518 billion in cloud, computing and infrastructure obligations extending over future years, according to Reuters. Those figures aren't directly comparable, but they show how heavily the spending plans depend on future growth. An IPO could provide more funding. The amount raised would depend on the offering's size and terms.
Robert Leitao, managing partner of Rothschild & Co, put it plainly. "It feels that there's quite a concentrated bet right now on two companies being able to generate enough revenues to support all the financing that's happened," he said. His published remarks don't say which two companies he meant.
I think Burry's 1960s leasing warning applies here too
Michael Burry compared today's AI buildout to the computer-leasing boom of the late 1960s in his Substack newsletter this week. He argued that GPU-backed debt and private credit echo the leasing models of that era, and that a chart Nvidia used to show its chips holding their value is built on projected rental income, not actual resale prices. Setting that chart against a five-year depreciation schedule creates an "apples-to-oranges" illusion, he wrote.
His argument was about Nvidia, but I think the same question applies here. The commercial bet is that the computing capacity will generate enough value to justify the five-year commitment, even as newer chips arrive.
I explored the resale-value question in Nvidia's talks with insurers, and the risks of supplier-backed demand in an earlier column on the AI bubble. Here, the question is who ultimately bears the risk. That depends on the guarantees, collateral and repayment terms, not simply on who designs the chips.
At Anthropic's Oct. 14 investor day and in its public prospectus, I'll be looking for evidence that customer revenue is catching up with its commitments. Financing can buy time. It can't establish that the spending will pay off.
