(Aug 21): Broadcom Inc is in talks with a group of lenders to raise more than US$60 billion (RM243 billion) in debt for an artificial intelligence (AI) chip financing deal that will benefit Anthropic PBC and other companies, according to people with knowledge of the matter.

The financing, which is still being ironed out, may also include a roughly US$30 billion junior debt tranche, said some of the people, who asked not to be identified because the information is private.

Under the proposed plan, Broadcom would guarantee a portion of the senior-secured tranche, which could range from about US$60 billion to US$70 billion, some of the people said. The numbers under discussion would potentially bring the total to as much as US$100 billion.

The agreement would add to a rush of deals aimed at financing AI infrastructure. AI companies like Anthropic, the maker of the Claude platform, are taking a bigger role in the build-out, aiming to ensure they have enough computing capacity. Broadcom, meanwhile, is looking to sell more chips and other data centre equipment, challenging Nvidia Corp in this lucrative market.

Blackstone Inc and Apollo Global Management are in talks with Broadcom to participate in the chip financing, following a partnership the three companies struck in June to help finance computing infrastructure, according to the people. The debt would be issued by a special-purpose vehicle, some of the people said.

After briefly declining, Broadcom shares rose as much as 1.1% in late trading after Bloomberg News reported on the discussions. The stock had climbed 5.2% this year through the close. 

The potential deal would help firms including Anthropic access chips and other key AI infrastructure, according to the people. It could be similar to the US$35 billion debt agreement that kicked off the group’s AI XPV partnership, they said. 

Talks are ongoing and details may change, according to the people. The financing also may be rolled out incrementally rather than all at once. 

Spokespeople for Broadcom and Anthropic declined to comment, as did representatives of Apollo and Blackstone.

In the first deal for the AI XPV platform, Broadcom backstopped most of the debt and investors including Apollo and Blackstone financed the purchase of custom AI chips to lease to Anthropic. This enabled the senior debt tranches to win investment-grade ratings at lower borrowing costs. 

The partnership, which plans to finance more than 20 gigawatts of computing power, will require hundreds of billions of dollars. That level of capacity would roughly equal the output of 20 nuclear plants. 

The unprecedented scale of the borrowing now under discussion underscores the capital requirements of the AI boom, which has prompted a slew of novel debt deals at a pace and scale that have simultaneously unnerved some investors. Nvidia earlier this month announced that a coalition of major financial firms including BlackRock Inc. and Goldman Sachs Group Inc were lining up more than US$500 billion to help fund the AI build-out.

Broadcom’s chief executive officer said in March that the company expects AI chip sales to top US$100 billion next year. The chipmaker has also struck other partnerships, including an accord with Apple Inc that is expected to be worth more than US$30 billion. Broadcom’s valuation has soared in recent years, propelled by agreements to make custom AI chips for firms like OpenAI.

Uploaded by Tham Yek Lee