Broadcom Inc. is reportedly looking to secure more than $60 billion in its latest private credit financing deal. This substantial funding is intended to fuel the company's ambitious expansion in the artificial intelligence sector, specifically for the development and deployment of AI chips. This new financing effort follows a $35 billion deal initiated in June, led by private credit firms Apollo Global Management and Blackstone Inc., which aimed to support Broadcom's AI XPV Platform and finance computing capacity for companies like Anthropic.
Bank of America analyst Tom Curcuruto has estimated that Broadcom's chip-financing vehicle could accumulate as much as $370 billion in senior debt by mid-2029, assuming a 20-gigawatt scale for its AI infrastructure. This figure includes an estimated $150 billion in new debt issuance in 2027 alone. While this debt would be held by the financing vehicle and not directly by Broadcom, Broadcom has agreed to backstop certain customer lease obligations, with its maximum exposure on the initial $35 billion transaction capped at $29 billion.
The financing structure enables AI customers to lease advanced AI accelerator racks without incurring the full upfront costs. Institutional investors provide the capital for these racks, which are then leased to customers, with Broadcom providing a backstop. This model helps facilitate the deployment of AI chips, addressing the massive capital requirements for new compute capacity. However, the potential for Broadcom's backstop exposure to grow as the platform scales remains a key point of attention for investors.
