Broadcom’s financing could cover roughly 33% of Anthropic’s $125.2 billion five-year TPU lease commitment. Besides this, Anthropic increased its collaboration with Google and Broadcom to 5 gigawatts of next-generation TPU capacity beginning in 2027. CFO Krishna Rao said it was the “most significant compute commitment to date” made by the company.
A page from Nvidia’s playbook
Analysts believe that Broadcom is pursuing something similar to what Nvidia has already carried out, namely relying on its financial assets to assist clients in the creation of enormous AI systems.
Nvidia is putting in place a massive amount of its balance sheet, and Broadcom is having to follow suit.
— Seaport Research analyst Jay Goldberg, via Reuters
It is anticipated that by 2027, Anthropic will be Broadcom’s largest compute client. According to Reuters, Broadcom predicts AI semiconductor revenues of about $115 billion in fiscal 2027 and $230 billion in fiscal 2028.
The circular-money worry
That setup has also led to worry regarding the reciprocal AI spending in which providers lend money to clients which then make large investments in their solutions.
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.
— Rothschild & Co managing partner Robert Leitao, via Reuters
Anthropic named the same concern. Its filing mentions that the role of Broadcom as both a provider and lender may lead to potential conflicts of interest. Such factors as pricing, decisions concerning hardware, and certain defaults may impact Anthropic’s ability to access compute and use the lending facility.
Financing as the new battleground
Broadcom has already been building the financial muscle for deals of this size. In June, it launched an AI financing platform with Apollo and Blackstone, beginning with a $35 billion transaction supporting more than one gigawatt of Anthropic compute and targeting more than 20 gigawatts through 2028.
The wider market explains why so much capital is moving into the sector. SIA says AI is driving semiconductor demand, while PwC expects>
Broadcom is already seeing that demand in its results. Cryptopolitan reported fiscal third-quarter AI semiconductor revenue of $16.7 billion, up 221% year over year. The $42 billion facility shows that in the next phase of the AI race, designing the chips may only be half the job. Financing the infrastructure around them could matter just as much.
