Broadcom to lend Anthropic up to $42 billion to lease its chips

The latest market report highlights that Anthropic’s IPO prospectus documents extensive partnerships with a handful of big tech firms. One stands out: chip maker Broadcom.

The firm's relationship with Anthropic spans compute supply, equipment leasing and financing — giving the semiconductor firm a central role in Anthropic's infrastructure buildout. That differentiates it from other major partners and market participants such as Amazon, which primarily provide cloud infrastructure and distribution for Anthropic's model Claude.

As part of that complex relationship, revealed in the IPO filing, Broadcom has agreed to lend Anthropic up to $42 billion to finance infrastructure spending.

In turn, Anthropic stands to become the largest customer in Broadcom’s bread-and-butter chip design business next year, making their relationship a prime example of the reciprocal spending that has animated AI skeptics on Wall Street, even as the AI lab readies a public offering that could see it valued at $2 trillion.

"It feels that there's quite a concentrated bet right now on two firms being able to generate enough revenues to backing all the financing that's happened," stated Robert Leitao, managing partner of Rothschild & Co.

As part of the financing arrangement, Broadcom could designate a financing partner, and the debt instruments could be converted into Anthropic shares. Anthropic stated in its filing it doesn't expect any notes to be sold before it completes its IPO.

The convertible note Anthropic would offering could finance around a third of the $125.2 billion commitment the AI lab has made for a five-year lease of tensor processing unit (TPU) computing capacity.

Alphabet's Google and Broadcom have collaborated on several generations of the TPUs. Anthropic announced in April an expanded partnership with Broadcom and Google that will give it access to multiple gigawatts of next-generation TPU compute capacity beginning in 2027.

For Broadcom, the financing arrangement follows what rival Nvidia has done in recent years — use its firm financial position to help lift chip sales.

"Nvidia is putting in place a massive amount of its balance sheet, and Broadcom is having to follow suit," Seaport Research market observer Jay Goldberg stated.

Potential conflicts of interest

Anthropic disclosed that Broadcom's role in supplying hardware and acting as a financing partner creates "potential conflicts of interest" that might affect Anthropic's ability to access the computing power needed for its work, according to the prospectus.

The AI lab additionally warned that Broadcom's decisions around pricing and hardware could affect its ability to procure enough computing infrastructure.

Broadcom did not comment. Anthropic declined to comment.

The firm warned that certain payment or performance defaults could make a substantial portion of its lease obligations immediately due while limiting its ability to use the $42 billion financing facility to cover those payments.

In the meantime, Anthropic is anticipated to become Broadcom's largest compute customer in 2027. Broadcom projects AI semiconductor topline of around $115 billion in fiscal 2027 and $230 billion in fiscal 2028.