Bank of America Corp. (NYSE:BAC), Blackstone Inc. (NYSE:BX), Citigroup Inc. (NYSE:C) and Morgan Stanley (NYSE:MS) committed $63 billion to finance Broadcom Inc’s (NASDAQ:AVGO) artificial intelligence chips and networking gear for Anthropic, in a deal some lenders reportedly weighed walking away from in recent weeks.
Inside the $63 Billion Structure
A newly formed special purpose vehicle will use the committed financing to buy Broadcom’s XPU AI accelerators and networking products and lease them to Anthropic, with deliveries expected to begin in 2027.
Bank of America, Citi and Morgan Stanley are arranging the first-lien portion, while Blackstone is the sole provider of the committed second-lien financing.
Broadcom is providing “residual value support” for the first-lien amount.
Banks Weighed Pulling Out
Some banks grew increasingly anxious about joining ‘Project North Star’ over the past few weeks, people familiar with the matter told The Wall Street Journal.
With interest rates rising and AI ventures harder to finance, some felt they weren’t being paid enough for the risk and considered pulling out altogether.
Broadcom CEO Hock Tan held 11th-hour weekend talks with bank executives and agreed to higher interest rates, and the banks got more comfort on the company’s guarantees against losses if Anthropic defaults.
Broadcom, Citigroup, Morgan Stanley and Bank of America did not immediately respond to Benzinga’s request for comment.
Anthropic’s IPO
On Monday, Anthropic publicly filed for an IPO with the Securities and Exchange Commission, seeking to list Class A shares on the Nasdaq under the ticker ANT.
The Wall Street Journal reported the company is targeting a debut the week of Nov. 16, raising $100 billion or more at a valuation of $1.5 trillion to $2 trillion.
The Claude maker’s IPO paperwork disclosed up to $42 billion in Broadcom lending and a five-year, $125.2 billion lease for tensor processing unit capacity, Reuters reported earlier this month.
AI Chip Financing Wave
Earlier this year, Apollo Global Management Inc. and Blackstone announced a $35 billion deal to finance chips for Anthropic, with Broadcom helping protect lenders against losses.
Broadcom is also reportedly seeking more than $50 billion to finance custom chips for OpenAI, the Wall Street Journal reported.
Space Exploration Technologies Corp. disclosed a roughly $40 billion chip-financing commitment with Apollo in a Monday filing.
Price Action: Shares of Broadcom closed 2.33% higher on Monday at $329.17 and rose 1.18% to $333.06 in extended trading.
Benzinga Edge rankings indicate Broadcom’s stock has a Momentum score in the 14th percentile and a Growth score in the 28th percentile.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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