Broadcom reportedly plans a ~$100B debt package to finance AI-infrastructure expansion, signaling massive capex into networking and switching infrastructure for hyperscaler buildout.

Broadcom Inc. is negotiating a massive debt financing package with major financial institutions that could ultimately total up to $100 billion to fund artificial intelligence chip acquisition and infrastructure expansion.

The proposed arrangement includes a senior-secured debt tranche ranging from $60 billion to $70 billion, along with a junior debt tranche of approximately $30 billion. Broadcom is set to backstop a portion of the senior debt. The capital will be issued through a special-purpose vehicle, with financial giants Blackstone Inc. and Apollo Global Management actively negotiating to participate. This move builds on a partnership the trio established in June to fund computing infrastructure.

Under that previous arrangement, the AI XPV vehicle secured $35 billion in financing, with investors funding custom chips leased directly to Anthropic PBC. Broadcom's guarantees on that earlier transaction helped the senior debt earn investment-grade credit ratings, keeping interest rates low.

The proceeds will secure custom AI chips and infrastructure for firms like Anthropic PBC, the creator of the Claude AI system, helping Broadcom expand sales of its data center equipment and challenge Nvidia Corp.'s dominance in the sector. Broadcom also produces custom processors for OpenAI and maintains a key partnership with Apple Inc.

Long-term plans for the AI XPV vehicle involve funding more than 20 gigawatts of computing power—a massive undertaking that will require hundreds of billions of dollars. This reflects an industry-wide surge in borrowing for AI projects, following moves like Nvidia's partnership with BlackRock Inc. and Goldman Sachs Group Inc. to support over $500 billion in infrastructure funding.

Broadcom expects its annual AI chip revenue to top $100 billion next year. Representatives for Broadcom, Anthropic, Apollo, and Blackstone all declined to comment on the ongoing talks. AVGO stock gained 0.4% on Thursday and extended gains after-hours, with retail sentiment on Stocktwits rated as extremely bullish. The stock has gained 4.4% year-to-date.