- Broadcom is reportedly lending up to $42 billion to Anthropic, per Anthropic's IPO prospectus obtained by Reuters, with the proceeds funding Anthropic's infrastructure buildout.
- Anthropic is expected to become Broadcom's largest compute customer by 2027, spending heavily on Broadcom technology in return for the financing.
- Broadcom described the structure on its September call as a platform called XPV run with Apollo and Blackstone, where outside partners underwrite the assets and Broadcom gives modest residual value guarantees. The first $35 billion tranche closed in June for Anthropic's 1 gigawatt deployment.
- Broadcom Q3 revenue hit $29.6 billion, up 86%, with AI chip revenue up 221% to $16.7 billion and record free cash flow of $13.7 billion. Management guides AI revenue to about $115 billion in fiscal 2027 and $230 billion in fiscal 2028.
- Critics call the arrangement circular financing — Broadcom helping fund the same customer that buys its chips — raising the risk that a failure in one piece spreads across the AI trade. Gross margin is expected to fall to about 73% in Q4 from 78% a year ago on a higher mix of memory-heavy chips.
Quotes
“Broadcom (AVGO) is reportedly lending up to $42 billion to Anthropic.”
“It is estimated to become Broadcom's largest compute customer by 2027.”
“Critics call this circular financing.”
“Broadcom said it may give “modest” residual value guarantees.”