Broadcom to lend Anthropic up to $42 billion to lease chips, in latest circular investment deal

Anthropic (ANTH.PVT) has signed a series of deals with tech heavyweights, ranging from Amazon to Microsoft, to fund and provide computing capabilities for the company’s AI models.

All three expressed concerns about circular financing, as each company provides funding to Anthropic, which then uses it to purchase its services.

You can now add Broadcom (AVGO) to the list. According to Reuters, which obtained Anthropic’s IPO prospectus, Broadcom is lending up to $42 billion to Anthropic for infrastructure construction.

In turn, Anthropic is expected to spend so much money on Broadcom’s technologies that developer Claude will become the chip designer’s largest computing customer by 2027.

In April, Anthropic announced that it was partnering with Broadcom and Google on an agreement under which Google would provide its tensor processing unit (TPU) capacity to Anthropic, with the supply coming online in 2027.

Broadcom designs Google’s TPUs.

But Anthropic doesn’t just buy chips. The company also relies on Broadcom for equipment leasing and financing, Reuters reports.

Wall Street analysts and investors have expressed concerns about circular investing at several points in the development of AI. Broadcom’s competitors Nvidia and AMD also provided funds to their own customers, including OpenAI and Anthropic, which the labs then used to pay for access to the companies’ high-power chips.

The worry about such financial projects is that if one domino falls, it will cause a chain reaction that will decimate the AI ​​business and, in turn, the global stock markets that have benefited from these companies and come to rely on them to keep the good times going on Wall Street.

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