Vendor Financing, New Costume: The Broadcom Anthropic Deal Puts the Supplier Behind the Loan

Anthropic warned its future shareholders, in the IPO filing it submitted on Monday, that compute secured today “may become less efficient or economically attractive relative to future alternatives,” and that the company could find itself committed to older-generation hardware while competitors moved on, or paying premium prices for resources that had declined in market value. The filing carries that warning alongside $161.2 billion of rent the company has promised to a single supplier.

The Broadcom Anthropic deal, announced Monday by Bank of America, Blackstone, Citigroup and Morgan Stanley, runs through a newly formed special purpose vehicle. The vehicle borrows $63 billion, buys Broadcom’s XPU accelerators and networking equipment, and leases them to Anthropic, with deliveries expected to begin in 2027. About $43.5 billion of it, 69%, is senior first-lien financing arranged by the three banks. Blackstone alone provides the committed second-lien portion. Broadcom supplies residual-value support equal to the first-lien amount, which is the polite term for what happens if the leased chips are worth less than the loans against them. The Wall Street Journal reported that chief executive Hock Tan spent nearly two months assembling the commitments, then held weekend talks to close the deal after some banks weighed walking away over interest rates and the risk of AI lending, conceding higher rates and stronger guarantees.

Those guarantees are the smaller half of what Broadcom has already tied itself to Anthropic. The S-1 puts the March 2026 lease arrangement between the two companies at approximately $125.2 billion of rent over five years, excluding interest, payable quarterly once equipment is ready for service, and non-cancelable by either side except in a default. Count every master equipment lease Anthropic holds with Broadcom and the rent reaches approximately $161.2 billion over their lives, also excluding interest. The lease cannot be cancelled. Anthropic deposited cash into a restricted account for Broadcom’s benefit in April 2026 and may have to deposit more. Two special purpose subsidiaries signed the leases, Anthropic itself guarantees their obligations, the leased equipment secures them, and a default under certain commercial agreements can trigger cross-defaults that accelerate substantially all of the company’s indebtedness.

A March 2026 note purchase agreement adds a third pipe besides the leases and the bank vehicle. Under it, Anthropic can issue up to $42 billion of convertible promissory notes to Broadcom or a designated financing partner, solely to pay quarterly rent under the 2026 lease. The notes pay 9% interest in kind, meaning interest accrues into principal rather than being paid in cash. If revenue performance conditions are not met, the rate rises to 13% and the conversion price drops to 85% of the 30-day average share price, from 90%. A change of control lets the holder take 150% of principal plus accrued interest in cash. Maturities run 60 months for the first $24 billion of notes, 63 months for amounts between $24 billion and $32 billion, and 57 months above $32 billion.

Sixty-three billion dollars covers about half of the $125.2 billion rent on a single five-year lease. That lease alone averages about $25 billion of rent a year, against first-half 2026 revenue of $16.3 billion, which annualizes to roughly $32.6 billion. The full $161.2 billion of Broadcom rent exceeds Anthropic’s $112.4 billion of cash plus $19.3 billion of short-term investments at June 30, a pile built from $141.1 billion of capital raised. Revenue grew from $1.2 billion in the first half of 2025, the operating loss narrowed to $693 million, and the headline $80.7 billion net loss is mostly a $72.4 billion non-cash accounting charge from convertible notes rising in value.

Lucent tried this first, with fixed-wireless gear instead of AI chips. The company agreed to provide WinStar Wireless with up to $2 billion in vendor financing for switches and gear, then refused a further $90 million loan in 2001; WinStar went bankrupt and Lucent wrote off $700 million. By the end of fiscal 2000 Lucent had agreements to provide up to $8.1 billion in credit or loan guarantees to its customers, with almost $2.1 billion outstanding, and it set aside $2.2 billion for customer bad debts in 2001 and another $1.3 billion in 2002. Revenues fell from $41.5 billion in 2000 to $8.5 billion in 2003, and the company merged into Alcatel in 2006. Nortel, the other North American equipment maker, had extended $1.4 billion by 2000, with financing offers reaching 130% of a purchase price. Lucent lent directly to its customers; Broadcom’s version routes bank debt through a vehicle and backstops only the senior portion.

William Blair’s Sebastien Naji put Broadcom’s peak exposure at $43 billion in the first year. The guarantee has a ceiling, and it falls over the deal’s life. Naji noted that the Anthropic deployments are already counted in Broadcom’s shipments for next year while covering only about half of what Anthropic needs in 2027, which is why he expects more financing deals. Truist analyst William Stein called the $43 billion “some, but minimal risk,” relevant only under what he called highly pessimistic circumstances, such as Anthropic falling short on its lease payments or the vehicle finding no other buyers for the chips. “Considering the wide use of TPUs by AI developers, these conditions seem remarkably unlikely to us,” Stein wrote in a note to clients. The chips at the center of the deal are Google-designed tensor processing units that Broadcom has co-developed with Google for more than a decade, which is a broader resale market than a single carrier’s switches ever had.

D.A. Davidson’s Gil Luria upgraded Broadcom from neutral to buy and raised his price target to $400 from $350. Broadcom’s own targets give that upgrade its stakes: Tan told investors on the September earnings call that the company had set its fiscal 2027 AI revenue outlook at $115 billion, with a doubling to $230 billion expected the following year, while the stock is down 2% on the year against a 60% surge in the Philadelphia semiconductor index. The shares gained 4% on Tuesday. In Luria’s view, “the biggest dislocation in the market is between” major chip makers “trading as if the cycle is already over” and the rest of AI-exposed hardware “trading as if the cycle may continue.” The market prices the chances for both the Anthropic and OpenAI listings as “near zero,” he argued, leaving “significant upside if those deals both materialize,” Luria wrote.

No notes had been issued under the $42 billion facility as of June 30, 2026. The draw period, which begins once the first equipment is ready for service, had not yet commenced.