Broadcom Plans to Lend Up to $42 Billion to Anthropic
Reuters reported after reviewing Anthropic's IPO filing that Broadcom has agreed to lend up to $42 billion for the company to lease its chips. The documents state that the relationship covers computing power supply, equipment leasing, and financing. Broadcom declined to comment, and Anthropic refused to comment.
This convertible note could cover about one-third of Anthropic's $125.2 billion, five-year lease commitment for tensor processors. The chips are multi-generation TPUs developed in collaboration with Google and Broadcom. In April 2026, Anthropic expanded its cooperation with both companies, obtaining several gigawatts of next-generation TPU computing power starting in 2027. Reuters stated that Anthropic is expected to become Broadcom's largest computing power customer by 2027.
The notes can be converted into Anthropic shares. Broadcom can designate financing partners. Anthropic stated in the documents that it does not expect any notes to be sold before the IPO is completed. In April 2026, it had already deposited cash into a restricted account set up for Broadcom's benefit and may add more under specific circumstances. The documents warn that partial defaults could accelerate large rent payments and restrict the use of the $42 billion to cover these obligations.
The filing separates Broadcom and Amazon. Amazon primarily provides cloud infrastructure and distribution for Claude. Broadcom, on the other hand, is both a chip design partner and a supplier of leasing capacity and loans. The documents highlight potential conflicts of interest and warn that Broadcom's decisions on pricing and hardware may affect Anthropic's ability to secure sufficient computing power.
Broadcom projects AI chip revenue of about $115 billion for fiscal year 2027 and about $230 billion for fiscal year 2028. Robert Leitao of Rothschild told Reuters that current financing is highly concentrated, betting that both companies can generate enough revenue to support all the financing that has already occurred. The documents did not specify the interest rate on the notes, conversion price, or whether the full $42 billion would be drawn.
The purchase is for computing power not yet online in 2027, while the sale is from Broadcom's balance sheet. This is seller financing driven by leasing commitments, not another round of equity investment from cloud vendors. Money flows from the chip company to the same customer's rent, leaving a path back to equity in the form of convertible bonds. The beneficiary is Broadcom, which needs to secure the next generation of TPU shipments, while Anthropic, which has not yet covered the $125.2 billion commitment, and other suppliers squeezed out of this custom chip chain, are under pressure.
Source: Public Information
ABAB AI Insight
The chip company sells chips using its own balance sheet, a strategy already employed by Nvidia. It provides financing, leasing, and investment to cloud vendors and model companies in exchange for not delaying GPU orders. Broadcom is applying the same method to the TPUs it helped design: supply, lease, and loan roles are consolidated with one counterparty. Anthropic's documents separate this point from Amazon, which provides cloud services and Claude's distribution, but does not involve this $42 billion note.
The flow of money is a commitment upfront, with chips delivered later. The $125.2 billion is a five-year lease commitment, and the $42 billion convertible note covers about one-third of it, with computing power starting to be delivered in 2027. In April 2026, Anthropic had already deposited cash into Broadcom's restricted account. The notes are not expected to be sold before the IPO is completed, leaving the conversion option to Broadcom. The motivation is to lock in the largest customer for the next generation of TPUs in advance, with Broadcom projecting AI chip revenues of about $115 billion and $230 billion for fiscal years 2027 and 2028, respectively.
This can be compared to Nvidia's seller financing for CoreWeave and cloud vendors, rather than traditional bank project loans. The current position is on the eve of expansion: capacity has not yet been delivered, but customers are already written in as the largest computing power clients. Google designs, Broadcom customizes, and Anthropic leases, merging three lines into one. Amazon remains on the distribution side and is not on this leasing agreement.
Structurally, this represents capital concentration. A model company's rent is advanced by the chip designer, retaining the right to convert to equity. Therefore, pricing power does not lie in the leasing market but with the party that simultaneously decides hardware prices and financing conditions. The conflict outlined in the documents is here: Broadcom's pricing and supply decisions will affect whether Anthropic can rent enough machines.