Anyone who has co-signed a loan knows how it works. The borrower pays a rate that reflects the risk, and the co-signer is on the hook if payments stop.
Broadcom Inc. (AVGO), one of the world’s most valuable chipmakers, just took that seat for Anthropic.
CEO Hock Tan spent nearly two months pushing banks to commit more than $40 billion to an Anthropic chip deal, The Wall Street Journal reported. With interest rates rising and AI ventures harder to fund, some lenders felt underpaid for the risk and weighed walking away.
Tan held last-minute weekend talks with bank executives and agreed to higher interest rates to keep them in.
The deal got done. Bank of America, Citigroup, Morgan Stanley, and Blackstone unveiled the $63 billion package on Monday, Oct. 26, 2026, in a press release. Earlier that day, Anthropic, the maker of the Claude chatbot, filed publicly for its IPO under the planned Nasdaq ticker ANT.
Also read: Broadcom fought AT&T over VMware: Now a telecom giant is all in
In the release, Tan said the deal “validates that there is capital available to finance such growth.”
I read the weekend scramble differently. The capital was available, but only at a higher price, and only with Broadcom backing the biggest piece. If you own an S&P 500 index fund, you own a slice of Broadcom and the promise it just made.
Broadcom’s credit is carrying Anthropic’s chip deal
A newly formed company will borrow the money and buy Broadcom’s AI chips and networking gear, according to the release. It will lease that equipment to Anthropic, with deliveries expected from 2027.
Broadcom’s role is where the risk sits. It is providing residual value support, which Reuters called effectively a significant guarantee, for an amount equal to the senior debt. In plain terms, Broadcom shields those lenders from losses if Anthropic defaults, the Journal reported.
That senior slice is about $43.5 billion, or roughly 69% of the total, two people familiar with the matter told Reuters. In effect, Broadcom’s credit is the safety net under the biggest checks.
Blackstone alone provides the committed part of the junior debt beneath it, according to the release. By my math, the remaining $19.5 billion or so carries Anthropic’s risk without Broadcom’s cushion.
To me, that unprotected slice is where lenders priced Anthropic on its own.
Broadcom’s exposure to one customer keeps growing
This isn’t Broadcom’s first backstop for Anthropic. Apollo Global Management (APO) and Blackstone financed an earlier $35 billion expansion of Anthropic’s computing capacity. Broadcom’s backstop in that deal was up to $29 billion, Reuters reported, citing a company filing.
By my count, Broadcom now stands behind as much as $72.5 billion of debt tied to one customer. Moody’s still describes Broadcom as one of the strongest large tech companies, according to Reuters. Even so, the rating agency warned that risk grows if several deals like this stack up quickly.
There is a quieter risk, too. Residual value support is effectively a bet on what used AI chips will be worth years from now. Broadcom also sells the newer chips that make older ones lose value.
I’d watch whether its sales pitch and its guarantee start pulling against each other.
More Broadcom:
- Broadcom stock gets massive $600 call even as AI fears grow
- Jim Cramer sees something Wall Street may be missing in Broadcom
- Broadcom CEO echoes Warren Buffett with warning for investors
Wall Street still rates Broadcom a Strong Buy
Investors don’t seem rattled yet. Broadcom shares were up more than 2% in premarket trading on Tuesday, Oct. 27, 2026, according to StockAnalysis. Over the past 52 weeks, though, the stock is down about 7%.
The shares sit far closer to their 52-week low of about $290 than to their high of $495, StockAnalysis data show. That gap suggests investors already have doubts about the AI spending boom.
Analysts are far less worried. Broadcom carries a consensus Strong Buy rating from 51 analysts, according to StockAnalysis. Their average price target of about $529 sits roughly 61% above the Oct. 26 close, the site shows. Its latest tracked calls:
- Upgraded to Buy from Neutral, target raised to $400 from $350: Gil Luria, D.A. Davidson, Oct. 27
- Buy maintained, $575 target: John Vinh, KeyBanc, Oct. 27
- Buy maintained, $575 target: Stacy Rasgon, Bernstein, Oct. 26
- Buy initiated, $600 target: Ivan Feinseth, Tigress Financial, Oct. 22
The chip boom is turning into a lending business
This deal reminds me of the late 1990s. Telecom equipment makers lent heavily to the carriers buying their gear, and many of those loans went bad when the boom ended.
Broadcom’s finances look far sturdier, judging by Moody’s view. Still, the pattern rhymes. The seller’s balance sheet is becoming part of what keeps demand flowing.
Anthropic’s IPO is the next real test. A strong debut would make every future lease payment look safer. A weak one would leave Broadcom’s guarantee as the thing lenders lean on.
That is when shareholders will learn what all that available capital cost.
