Wall Street tests lender appetite with $60 billion Broadcom-Anthropic deal - FT

Wall Street’s major financial institutions have initiated the syndication of a record $60 billion debt package designed to back Anthropic’s lease of Google semiconductors, marking the largest chip-financing transaction to date as technology giants race to secure artificial intelligence computing infrastructure. Bank of America, Citigroup, and Morgan Stanley, having committed to fund the massive financing, have begun reaching out to peer institutions to offload portions of the debt, according to reporting from the Financial Times.

The transaction is being widely watched as a crucial gauge of debt market appetite for capital-intensive AI ventures at a time when fixed-income investors are increasingly demanding higher risk premiums. Mounting skepticism surrounds the trillions of dollars pouring into advanced hardware, as market participants question whether these unprecedented capital expenditures will yield sustainable, long-term profitability.

Broadcom is playing a pivotal role in the financing structure by providing credit support to help Anthropic manage its borrowing costs. The underlying capital will fund Anthropic’s advanced chip orders scheduled for 2027 delivery, with lease payments commencing only after the hardware is fully deployed.

Syndication began on Monday with $42 billion in senior secured loans backed by Broadcom’s A-minus credit rating, a structure that could eventually allow the debt to be sold across private placement or investment-grade bond markets. An additional $18 billion junior debt tranche without Broadcom guarantees is expected to launch later, with Blackstone already committing approximately $9 billion while assisting in syndicating the remainder.

Because the unbacked junior tranche exposes lenders directly to Anthropic’s credit profile, underwriters may hold off on tapping broader markets until after the startup completes its planned initial public offering later this year. Public disclosures surrounding the offering would provide potential lenders with much-needed visibility into the company’s balance sheet and operational trajectory.

Alternatively, Broadcom’s latest quarterly report and investor term sheets indicate Anthropic could issue up to $42 billion in convertible notes to Broadcom to cover its lease obligations. The multi-part agreement underscores how custom tensor processing units, co-developed by Broadcom and Google, are becoming central to challenging Nvidia’s dominant position in the AI hardware market.