Bank of America, Blackstone, Citi and Morgan Stanley announced on October 26 a $63 billion deal to finance Anthropic's purchase of Broadcom AI chips and networking equipment. Deliveries are expected to begin in 2027, and Broadcom will provide a residual value guarantee equal to the amount of the senior loan. Citing two people familiar with the matter, Reuters reported that the senior loan is about $43.5 billion. That puts Broadcom, the chip seller, in the position of absorbing declines in asset value on roughly 70% of the total deal. In this deal, the structure appears to leave Broadcom bearing losses from falling prices on the collateral chips, in place of the lenders, up to about $43.5 billion.
An SPV buys the chips and leases them to Anthropic
According to the announcement, a newly created special purpose vehicle (SPV) will use the four firms' committed financing to buy Broadcom XPUs (AI accelerators) and networking products, and lease them to Anthropic. Bank of America, Citi and Morgan Stanley are arranging the first-lien portion, which is the senior loan. Blackstone alone is providing the committed second-lien financing, which ranks lower in repayment priority. The deal is part of a strategic compute capacity agreement that Broadcom announced earlier.
Broadcom CEO Hock Tan said demand for AI compute continues to grow at an extraordinary pace, and that the deal shows the funding can be raised. Reuters notes that chipmakers have offered guarantees to absorb declines in asset value before. In the previous deal, Apollo and Blackstone agreed to provide $35 billion in funding, and Reuters, citing Broadcom's filings, reported that Broadcom's guarantee was up to $29 billion. Everything up to this point can be confirmed from the announcement and Reuters' reporting.
A residual value guarantee is a promise by the guarantor to cover the difference if the collateral chips are later sold for less than what is owed to the lenders. A separate Reuters report said Broadcom would absorb declines in asset value up to the amount of the first-lien debt. However, the announcement does not break out the first-lien and second-lien amounts.
Counting the weight of the guarantee
Because the announcement gives no breakdown, the figures rely on Reuters' reporting. Citing two people familiar with the matter, Reuters said the first-lien debt is about $43.5 billion, or 69% of the total. If the guarantee cap equals the first-lien debt, the calculation is as follows.
If the account Reuters received from its two sources is correct, Broadcom's residual value guarantee would reach up to about $43.5 billion, roughly 69% of the $63 billion total, leaving about $19.5 billion on the second-lien side.
The arithmetic is simple: $43.5 billion divided by $63 billion is 0.69, and $63 billion minus $43.5 billion leaves $19.5 billion. This assumes the entire remainder is second lien. Converting at the roughly ¥158 per dollar rate seen in Tokyo trading at 5 p.m. on October 21, the total deal comes to about ¥10 trillion and the guarantee cap to about ¥6.9 trillion. The October 26 closing rate could not be confirmed, so this conversion only indicates the approximate scale.
Compared with the previous guarantee cap of up to $29 billion, the current $43.5 billion is about 1.5 times larger. However, the earlier figure is a cap stated in a filing, while the current one is an estimate based on the first-lien amount relayed by anonymous sources, so the two are not necessarily measured on the same basis. Even so, the trend toward larger guarantees is visible.
The point to keep in mind is that the guarantor and the seller are the same company. New-generation products could be one factor that pushes down resale prices of chips. In that case, Broadcom would be growing sales by selling the new products while carrying the guarantee burden on the old ones. This is the author's reading drawn from the structure, not something stated in the reports.
Why a conditional guarantee still matters, and what would overturn this view
The strongest counterargument is that this guarantee is a conditional promise, not a cash outlay. If Anthropic keeps paying its lease fees and the chips resell at the expected prices, Broadcom pays nothing. Moody's rates Broadcom among the financially strongest large technology companies, so it is plausible that even a guarantee of this size, $43.5 billion, can be absorbed. Anthropic filed IPO paperwork on October 26. If it can raise money from the equity market, its ability to pay lease fees would be reinforced.
Still, I stand by the narrowly scoped view, for two reasons. The first is the kind of loss the guarantee covers. The shortfall when the collateral chips lose value is a loss that would normally fall on the senior lenders, and Broadcom is taking it on up to about $43.5 billion. Anthropic's ability to repay remains important, but who bears the loss from price declines changes.
The second is that Moody's, in the same assessment, warned that risk rises if multiple deals are done in a short period to meet the enormous funding needs of frontier AI labs. As Reuters relays it, the firm says risk increases if multiple transactions occur in quick succession. The $63 billion deal has come together right after the previous $35 billion one, which is close to the situation the warning envisions. Reuters also reported that Anthropic's filing disclosed large losses.
The conditions under which this view would be wrong are observable. In the previous deal, Broadcom's filing revealed the guarantee amount. If Broadcom discloses the guarantee cap in a filing this time and it turns out to be smaller than the first-lien debt, the premise of "up to the same amount" collapses. If the cap falls below about $40 billion, the share of the total would drop to the low 60% range, and the figures would need revising. If it is confirmed at around $43.5 billion, the view gains support.
From 2027, when deliveries are expected to begin, the resale prices of the chips and the status of Anthropic's lease payments will be the next factors to watch.