Banks, Blackstone Form $63 Billion Financing Vehicle for Broadcom AI Tech

A coalition of major financial institutions is lining up $63 billion in financing to purchase artificial-intelligence computing infrastructure from Broadcom AVGO 2.33%increase; up pointing triangle and lease it to Anthropic.

The firms involved in the deal — Bank of America BAC -0.08%decrease; down pointing triangle, Blackstone, Citi and Morgan Stanley — plan to form a special purpose vehicle, which will purchase Broadcom’s XPU AI accelerators and networking solutions for Anthropic to lease.

The deal is part of Broadcom’s existing strategic compute capacity agreement. Deliveries to the new special purpose vehicle are expected to begin next year.

Bank of America, Citi and Morgan Stanley are arranging the first lien portion of the financing, with Blackstone providing the committed portion of the second lien financing. Broadcom also plans to provide residual value support to the new entity equal to the first lien portion.

“Fundamentally, the need for AI compute continues to grow at an extraordinary pace,” Broadcom Chief Executive Hock Tan said. “This validates that there is capital available to finance such growth and that Broadcom is uniquely positioned to enable it.”

The deal comes hours after Anthropic publicly unveiled its filing for an initial public offering, which The Wall Street Journal reported could value the company between $1.5 trillion and $2 trillion.