Broadcom Bets $42 Billion on Anthropic - Broadcom (NASDAQ:AVGO)

Broadcom (AVGO) will lend Anthropic up to $42 billion for AI infrastructure, according to Reuters. Anthropic has similar deals with Amazon, Microsoft, and others, raising concerns about circular financing.

Broadcom reportedly plans to lend Anthropic up to $42 billion for chip leases, according to Reuters. Nvidia is also financing AI labs, but its $500 billion chip-backed financing plan faces scrutiny from bankers.

Broadcom (AVGO) stock fell 1.5% to $346 after reversing below $350. The company may provide up to $42B in financing for Anthropic's computing leases, and faces China-related risks. Q3 revenue was $29.6B, up 86% YoY, with strong earnings growth. AVGO's stock is vulnerable to further selling if it stays below $350.

Broadcom will lend Anthropic up to $42 billion to finance a $125 billion equipment lease over five years. The deal, disclosed in Anthropic's IPO prospectus, highlights a potential conflict of interest, as Broadcom's pricing decisions could impact Anthropic's margins and repayment ability.

Anthropic CEO Dario Amodei committed to $518B in computing infrastructure spending over the next decade, with 80% of obligations non-cancelable. Key suppliers include Broadcom, Google, Amazon, Microsoft, Nvidia, and AMD, with commitments ranging from $31.4B to $161.2B. Anthropic reported $4.6B revenue, $7.33B compute spend, and $8B operating loss in 2025, with a $42B net loss including a $34B fundraising charge. The company is set to IPO in early November, according to Reuters.

Broadcom (AVGO) shares dropped 1.1% to $347.44 on October 1 after reports of a potential $42 billion financing commitment linked to Anthropic's computing leases. The company's filing outlines convertible notes and a lease backstop with a $29 billion liability ceiling. Investors are assessing the financial exposure and growth implications.