Apollo Global Management Inc. and Blackstone Inc. have finalized a substantial $35 billion financing package designed to support Anthropic PBC's expansion of its artificial intelligence (AI) infrastructure. This deal, one of the largest private credit transactions in history, is structured across three tranches and is expected to soon begin trading. The primary purpose of this capital is to fund Anthropic's acquisition of custom AI chips from Google, which are manufactured by Broadcom.
The financing package is noteworthy for its unique structure, involving a circular agreement where Broadcom, the chip manufacturer, backstops the debt. This arrangement was crucial in securing the investment-grade rating for the A1 and A2 tranches of the deal, appealing to institutional investors seeking protection. Without Broadcom's guarantee, the deal would likely not have materialized, as Broadcom itself benefits from the significant revenue generated by this $35 billion chip sale.
This $35 billion deal highlights the massive investment required for AI infrastructure, particularly in acquiring specialized hardware. The capital is designated for purchasing an estimated one gigawatt of compute power, equating to roughly one million Tensor Processing Units (TPUs). This transaction underscores a shift in focus from data center construction costs to the even higher expense of the internal infrastructure needed to power advanced AI operations. This financing model is seen by some as potentially creating a new investment category for AI.
