Wall St banks, Blackstone line up $63 billion to finance Broadcom AI chips for Anthropic

Oct 26 (Reuters) - Bank of America BAC.N, Blackstone BX.N, Citi C.N and Morgan Stanley MS.N will provide $63 billion in financing to buy Broadcom's AI chips and networking gear for Anthropic, in one of the largest debt deals tied to the AI buildout.

Rising AI demand is driving massive investment in computing infrastructure as technology companies race to secure capacity for increasingly complex workloads.

The transaction will be carried out through a newly formed special purpose vehicle that will purchase Broadcom's AVGO.O AI accelerators and networking equipment and lease them to the Claude maker, the companies said on Monday.

Bank of America, Citi and Morgan Stanley are arranging the first-lien financing, while Blackstone will provide the committed portion of the second-lien financing.

Broadcom is providing "residual value support" to senior debt lenders, effectively providing a guarantee to them in the financing structure, agreeing to absorb potential declines in the value of the assets up to an amount equal to the first-lien debt, although the release did not disclose the size of this debt.

Deliveries are expected to begin in 2027 as part of a previously announced strategic compute capacity agreement involving Broadcom, the companies said.

Apollo and Blackstone had agreed to finance a $35 billion expansion of Anthropic's AI computing capacity under a prior agreement with Broadcom.

The latest deal highlights the growing role of banks and alternative asset managers in financing the infrastructure needed to support rising demand for AI computing capacity.

Anthropic filed for a potentially record-breaking IPO on Monday, even as disclosures of steep losses and security concerns threatened to test investor appetite for the AI heavyweight.