Benchmark "Chip Financing" Deal: Apollo, Blackstone, and Broadcom Join Forces to Raise $35 Billion for Anthropic to Lease Google TPUs

The private credit market is providing unprecedented ammunition for the artificial intelligence infrastructure race.

On June 6, Bloomberg reported that Apollo Global Management and Blackstone have completed a $35 billion financing arrangement, with the funds designated for purchasing Tensor Processing Units (TPUs) custom-developed by Google for Anthropic, which will then be leased to Anthropic.

Broadcom provided credit enhancement for the largest portion of senior debt in the transaction, while Morgan Stanley served as advisor and helped arrange the deal. This is one of the largest private credit transactions to date, marking a milestone stage for the emerging market of "chip financing." The transaction was priced in three tranches, with approximately half of the debt already distributed to other institutional investors.

As mentioned in a previous article by Wall Street Insight, Broadcom CEO Hock Tan stated during this week's earnings call that the company is working with Apollo, Blackstone, and other top-tier investors to build an infrastructure system called the "AI XPV Platform," planning to deploy over 20 gigawatts of computing capacity by 2028. Apollo's current transaction is among the first implementations of this platform.

Analysts note that the timing of this financing completion is quite sensitive—Anthropic has just secretly filed for a U.S. IPO and completed a funding round last month valuing the company at $965 billion. This debt arrangement further solidifies the financial foundation for its AI infrastructure expansion and sets a new reference standard for chip financing models across the industry.

Transaction Structure: Three-Tier Debt Combined with SPV Equity

This financing adopts a Special Purpose Vehicle (SPV) structure. The SPV raises capital through a hybrid of debt and equity to purchase chips, which are then leased to clients. Debt repayment relies primarily on lease income, supplemented by the long-term residual value of the chips.

The $35 billion in debt is structured and issued in three tranches. Among them, the senior A1 tranche is sized at $6 billion, and the A2 tranche at $24 billion; both tranches receive credit enhancement from Broadcom, allowing them to enjoy lower financing costs aligned with Broadcom's strong credit rating and obtain mid-range investment-grade private ratings.

According to reports, insiders revealed that the A1 tranche was sold to a group of banks at a coupon rate of 100 basis points above U.S. Treasury yields; the A2 tranche was priced at par with a 5.75% coupon, with buyers including institutional investors such as Athene, Apollo's insurance arm—entities that prefer high-quality debt to match their long-term liabilities.

The third tranche, Class B notes, amounts to $4.5 billion, does not enjoy Broadcom's endorsement, and was sold at par with an 8.5% coupon. Additionally, Atlas SP Partners, Apollo's structured finance division, provided $800 million in equity, effectively becoming the owner of the SPV.

A core highlight of this transaction is the "residual value support" agreement provided by Broadcom. Under this arrangement, if Anthropic fails to meet lease payment obligations within a specified period, the SPV will sell the chips to repay debt investors; if the realized value of the chips is insufficient to cover the debt, Broadcom will assume 100% responsibility for compensating the shortfall to A1 and A2 investors.

This mechanism mirrors the structure of another large debt transaction seen previously—when Meta Platforms provided similar asset value protection for its Hyperion data center in Louisiana, also arranged by Morgan Stanley, allowing the related bonds (so-called "Beignet Bonds") to trade at levels comparable to Meta's corporate bonds.

Broadcom's credit enhancement has given this chip financing a significant pricing advantage and laid the foundation for the market promotion of this emerging asset class.

Chip Financing Market: AI Capital Race Spurs New Asset Class

This transaction is viewed by the market as a landmark event signaling the formal formation of the chip financing market. As the new wave of data center construction continues, the sustained demand for specialized hardware is expected to drive rapid expansion in this niche segment.

Hock Tan explicitly stated during the earnings call that Broadcom's strategic vision is to combine its leading technology with investor partners possessing strong balance sheets, providing sufficient scale of computing power to top-tier AI frontier labs like Anthropic and OpenAI at the lowest cost and energy consumption.

He characterized this transaction as the "first batch" of the AI XPV Platform, implying that more similar transactions will follow.

Analysts believe that tech companies are knocking on every door in the credit market to cope with the unprecedented capital demands of AI, forcing Wall Street to continuously design new debt structures to keep pace.

The $35 billion transaction jointly completed by Apollo, Blackstone, and Broadcom is not only one of the largest deals in the history of private credit but also provides a replicable financing template for the entire industry.