Broadcom will lend Anthropic up to $42B for its buildout

Broadcom designs the Google chips Anthropic plans to run on, and Anthropic's IPO prospectus shows Broadcom will also lend it the money for its buildout. According to Reuters, which obtained the prospectus, Broadcom is lending the Claude developer up to $42 billion for its infrastructure, Yahoo Finance reports.

At a glance

• Reuters' account of Anthropic's IPO prospectus shows the company relying on Broadcom for more than chips. It also uses Broadcom for equipment leasing and financing tied to its infrastructure buildout.
• The loan reaches up to $42 billion, and Anthropic is estimated to spend enough on Broadcom technology to become the chip designer's largest compute customer by 2027.
• The deal adds Broadcom to a list of suppliers, including Amazon and Microsoft, that both fund Anthropic and sell it compute, and investors see that pattern as circular financing.

If you haven't been following, Anthropic and Broadcom already had a deal. In April, Anthropic announced a deal with Broadcom and Google under which Google would provide Tensor Processing Unit capacity, with that supply coming online in 2027. Broadcom designs Google's TPUs, so it was part of the arrangement before any loan came up.

The new detail comes from the prospectus Reuters obtained. Anthropic is buying chips from Broadcom and is also turning to the company for equipment leasing and financing, with the lending set at up to $42 billion. In return, Anthropic is estimated to spend so much on Broadcom technology that it becomes the chip designer's largest compute customer by 2027.

Broadcom is the latest name on a long list. Amazon and Microsoft have each signed deals with Anthropic that both finance the company and provide computing capacity for its models. Broadcom's rivals Nvidia and AMD have also funded their own customers, including OpenAI and Anthropic, and those labs then used the money to pay for access to the companies' chips.

Wall Street analysts and investors have raised this concern at several points during the AI buildout. They fear a chain of failures: if one company in the chain falls, the damage could spread across the AI trade and into the global equity markets that have come to depend on these firms.

On the stock side, the Yahoo Finance quote had Broadcom at $346.72 as of 11:00 AM EDT on October 1, down $4.47, or 1.27%, with the market open. The source doesn't link that move to the Anthropic report.

Circular financing works like a loop. A supplier lends money to a customer or invests in it, the customer spends that money on the supplier's products, and the supplier records those purchases as revenue. Picture a car dealer lending you the down payment for a car from its own lot. The sale is real, but if you can't pay, the dealer loses on the loan as well as the car.

The prospectus details reported so far don't include the loan terms, so we don't know the interest rate, the repayment schedule or how much of the $42 billion Anthropic will actually borrow. In our view, the words "up to" matter as much as the number. The figure is a ceiling, and with a customer this close, the loan reads as Broadcom paying for part of its own 2027 sales.

When the TPU supply arrives

The next date to watch is 2027, when the Google TPU capacity from the April deal is due to come online and Anthropic is estimated to become Broadcom's largest compute customer. Until then, more detail will most likely come from the prospectus itself as Anthropic heads toward its IPO. The report gives no listing date and no terms for the Broadcom loan.