Report: Hock Tan Stepped In to Seal Broadcom's $63 Billion Anthropic Chip Financing

Broadcom (NASDAQ: AVGO) CEO Hock Tan held 11th-hour talks with bank executives over the weekend to get lenders to finalize their commitments to a $63 billion financing for Anthropic's chips, the Wall Street Journal reported Monday night. Some lenders were getting cold feet, the Journal said. Broadcom agreed to higher interest rates, and banks got more comfort on its guarantees against losses if Anthropic defaults.

The Journal described Broadcom's role as "supplier, guarantor, negotiator." Broadcom expects its exposure to peak at $43 billion. Its shares closed up 2.33% at $329.17 on Monday, before the deal was announced.

The Deal, as Announced

Bank of America (NYSE: BAC), Blackstone (NYSE: BX), Citigroup (NYSE: C) and Morgan Stanley (NYSE: MS) announced the $63 billion transaction on Monday. The same day, Anthropic made its IPO filing public.

Borrower: A newly formed special purpose vehicle will buy Broadcom XPU accelerators and networking gear and lease them to Anthropic. SPV counsel Milbank names it Northstar Compute LLC and describes the $63 billion as "debt and equity."

Lenders: Bank of America, Citigroup and Morgan Stanley are arranging the first-lien debt. Blackstone is the sole provider of the committed portion of the second lien.

Broadcom's role: Broadcom provides "residual value support" equal to the first-lien amount. Its investor summary says it would owe any gap between 72.5% of what is owed on the lease and the value of the AI racks. It expects that exposure to peak at $43 billion and fall to zero over five years of lease payments.

Senior debt: About $43.5 billion, or 69% of the total, Reuters reported, citing two sources.

Pricing: Final rates have not been disclosed. In mid-October, before the weekend talks, trade publication IFR reported initial terms of $42 billion of senior loans in two tranches, at 150 and 187.5 basis points over SOFR, both due in 2033. The Journal says Broadcom then agreed to higher rates, by an amount it did not report.

Collateral: Anthropic's S-1 says its Broadcom lease obligations are secured by the leased equipment and guaranteed by Anthropic, PBC.

How It Ties to the TPU Deals

In April, Broadcom said Anthropic would access about 3.5 gigawatts of TPU-based compute through Broadcom starting in 2027, separate from Broadcom's long-term agreement to build TPUs for Alphabet's (NASDAQ: GOOGL) Google. It said the parties were in talks with "operational and financial partners." Monday's release calls the financing part of a previously announced Broadcom compute agreement, with deliveries from 2027.

The S-1 lists five-year Broadcom equipment leases with about $161.2 billion of rent, excluding interest. The biggest, signed in March 2026, carries about $125.2 billion, and Broadcom "intends to assign" it to a designated financial partner. Anthropic can also issue up to $42 billion of convertible notes to Broadcom or that partner to cover the rent, at 9% paid-in-kind interest, or 13% if revenue conditions are missed.

In our view, the timing and the 2027 start point to Northstar as that partner. Neither company has confirmed it. More on Anthropic's commitments is in our S-1 analysis.

Broadcom's Exposure

The June deal, led by Apollo (NYSE: APO) with Blackstone, launched Broadcom's AI XPV platform for more than 1 gigawatt of Anthropic capacity. Broadcom's 10-Q puts its maximum backstop there at about $29 billion, with nothing paid so far. By our math, the two come to $72 billion, though they need not peak at the same time.

Broadcom's fiscal third-quarter AI semiconductor revenue was $16.7 billion, up 221% from a year earlier, and it guided to $21.7 billion for the quarter ending Nov. 1. By our math, the $43 billion peak is about twice that guide. The top five end customers made up about 50% of revenue in the first three fiscal quarters.

Moody's warned that risk would rise if Broadcom did several such deals in a short period, Reuters reported.

How It Compares

The Journal called the deal "the biggest ever to raise money for AI infrastructure." For scale, S&P rated $27.3 billion of notes for the Hyperion campus of Meta (NASDAQ: META), a venture with Blue Owl Capital (NYSE: OWL) funds. Banks readied about $38 billion of debt for Vantage campuses tied to Oracle (NYSE: ORCL), Bloomberg reported in September 2025. CoreWeave (NASDAQ: CRWV) closed an $8.5 billion GPU-backed loan facility in March. In January, Apollo led $3.5 billion of financing for a Valor fund's $5.4 billion purchase of GPUs leased to xAI. Riskier deals are in our Datacenter Junk Bond Tracker.

The Alpha Take

In our view, Broadcom is trading credit risk for financed chip demand. If Anthropic pays its leases, the $43 billion falls to zero. If it stumbles, Broadcom covers the gap between 72.5% of what is owed and what the racks are worth, on top of a backstop of up to $29 billion from June.

The weekend talks and higher rates the Journal describes suggest lenders wanted more pay for that risk. Final loan pricing, still undisclosed, would show how much more. This is analysis, not investment advice.

What to Watch

Broadcom 8-K: None on the deal was on EDGAR as of 2:30 a.m. ET Tuesday. One could disclose final terms.

Loan pricing: Whether final senior spreads land above the initial terms IFR reported.

Anthropic's IPO: Whether amended S-1s name Northstar as the designated partner.

Broadcom's next report: Broadcom said on its September earnings call that it plans to report fiscal fourth-quarter results after the close on Wednesday, Dec. 9. Watch AI revenue against the $21.7 billion guide and any update on backstop exposure.

Alphabet earnings: Due Oct. 28. Track spending in our Hyperscaler Capex Tracker.