Broadcom Partners With Wall Street Bigwigs To Forge $63B Deal To Power Anthropic’s AI Hardware

• A group of major financial companies has created a special purpose vehicle (SPV), a separate company set up for a specific task. It will buy Broadcom's custom AI processors and networking equipment and lease them directly to Anthropic.

• Bank of America, Citigroup, and Morgan Stanley are arranging the first-lien senior debt, while Blackstone is providing the second-lien financing.

• Shipments of Broadcom's XPU AI chips and networking equipment are expected to begin in 2027 under a computing capacity agreement announced earlier.

Broadcom Inc. (AVGO), a chipmaker, and a group of major Wall Street financial companies announced a $63 billion financing deal on Monday to provide hardware to Anthropic, an artificial intelligence startup.

The deal brings together Bank of America Corp. (BAC), Blackstone Inc. (BX), Citigroup Inc. (C), and Morgan Stanley (MS). These companies will help pay for the expensive hardware needed to train and run the next generation of AI models.

Under the deal, the group has created a special purpose vehicle (SPV) that will use the money to buy Broadcom's specialized XPU AI chips and high-speed networking equipment. The SPV will then lease the hardware to Anthropic. Deliveries are expected to begin in 2027.

Broadcom shares rose about 1.3% in after-hours trading on Monday.

Who Is Paying?

The deal uses two levels of debt to manage risk and provide the large amount of money needed. Bank of America, Citi, and Morgan Stanley are leading the arrangement of the first-lien debt. Blackstone, an investment company that manages assets, is the only provider of the agreed second-lien financing.

If assets must be sold to repay debts, the first-lien lenders have priority over the second-lien lenders. This means the first-lien debts are paid before the second-lien debts.

"Financing AI demands capital solutions at unprecedented scale," said Vis Raghavan, head of banking and executive vice chair at Citi. He was pointing to the unusually large amounts of money needed for today's technology projects.

Building AI Systems as Demand Grows

The deal shows how much money is needed to build the computing systems that support AI around the world. As software developers need more computing power, chipmakers and cloud service providers are increasingly turning to Wall Street to help pay for servers and other hardware.

Broadcom's move reflects a growing effort by chipmakers to compete with industry leader Nvidia Corp. (NVDA). Nvidia also made similar financing arrangements earlier this year.

"Fundamentally, the need for AI compute continues to grow at an extraordinary pace," Broadcom President and Chief Executive Officer Hock Tan said in a statement. "This validates that there is capital available to finance such growth and that Broadcom is uniquely positioned to enable it."

AVGO Stock: What Individual Investors Think

On Stocktwits, individual investors' overall sentiment toward Broadcom was 'bearish,' meaning more negative than positive. The number of messages about the stock was 'normal.'

Broadcom shares have fallen about 6% since the start of the year.

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Shashank Nayar does not own any of the stocks mentioned in this article. StockTwits' news team publishes content for information only, not as investment advice. For more details, see its editorial policy. This article was first published on StockTwits.