Broadcom is strengthening its ties with Anthropic ahead of its IPO. What does this mean for both companies?

Anthropic, the world’s most valuable AI startup, disclosed in its IPO prospectus that chipmaker Broadcom will provide it with $42 billion in computing power in the form of debt financing, Reuters has learned. This debt may be converted into Anthropic shares after the company’s public offering. The relationship between the two companies increasingly resembles a circular transaction, which could heighten investor concerns, the agency notes.

According to Anthropic’s IPO prospectus, which Reuters reviewed, as part of a complex set of relationships, Broadcom is prepared to provide the AI giant with up to $42 billion in debt financing for infrastructure expenses. In turn, as early as next year, Anthropic could become the largest customer of Broadcom’s core chip-design business, the agency noted. This gives the semiconductor manufacturer a key role in building Anthropic’s infrastructure and sets it apart from other major partners and investors, such as Amazon, which primarily provide the startup with cloud computing power and distribution channels for the Claude AI model, Reuters reports.

This relationship is a prime example of circular deals among players in the AI market, which are raising more and more questions among skeptical investors on Wall Street, the agency notes.

"Right now, it seems that too much depends on whether both companies will be able to generate enough revenue to service all the financing they have already raised," Robert Leitao, managing partner at Rothschild & Co, told Reuters.

Under the terms of the agreement, Broadcom may bring in a financing partner, and the debt instruments may subsequently be converted into Anthropic shares. In its prospectus, the company stated that it does not expect them to be issued until the IPO, according to Reuters. Anthropic’s convertible debt securities could finance approximately one-third of the $125.2 billion in obligations that the AI company assumed under a five-year contract to lease computing power based on Tensor Processing Units (TPUs).

Broadcom and Anthropic responded to requests for comment from Reuters.

Reuters warns that this arrangement strengthens the interdependence between the two companies. The chipmaker is prepared to provide Claude’s developer with billions in funding, while Anthropic becomes one of the largest buyers of computing infrastructure that Broadcom itself is helping to build.

This resembles the strategy that its competitor, Nvidia, has employed in recent years, Reuters notes. Thanks to its strong balance sheet, the market leader in AI chips can finance customer development and thereby sustain demand for its own products.

"Nvidia is drawing on massive resources from its balance sheet for this, and Broadcom is forced to follow suit," Jay Goldberg, an analyst at Seaport Research, told the news agency.

In its IPO prospectus, Anthropic warned that Broadcom’s dual role as both a hardware supplier and a financial partner creates “potential conflicts of interest.” This could affect the AI startup’s ability to obtain the necessary computing power, the document states. Broadcom’s decisions regarding pricing and shipments could also make it difficult for the company to secure sufficient computing infrastructure.

Anthropic reported that in April it deposited funds into a restricted account on behalf of Broadcom. Under certain circumstances, the startup may be required to contribute additional funds. The company also stated that a breach of certain payment obligations or contractual obligations could result in a significant portion of the lease payments becoming immediately due and payable. At the same time, Anthropic’s ability to use Broadcom’s $42 billion credit line to cover these payments may be limited.

In its latest quarterly report released in early September, Broadcom projected that its revenue from AI semiconductors would total approximately $115 billion in fiscal year 2027, which begins on November 2, and reach $230 billion in fiscal year 2028.

The partnership between Anthropic and Broadcom has expanded rapidly over the past year. Back in December 2025, the chipmaker announced a major order for semiconductors from Anthropic.

In March, Broadcom CEO Hock Tan said the company expects to supply Anthropic with enough TPUs to provide about 1 gigawatt of computing power in 2026 and more than 3 gigawatts in 2027.

In April, the partnership expanded even further. Broadcom committed to continuing to develop specialized TPUs for Google through 2031, and Anthropic is set to become one of the primary users of this infrastructure. Starting in 2027, the developer of Claude will have access to approximately 3.5 gigawatts of TPU-based computing power.

At that time, Mizuho analysts estimated Broadcom’s potential revenue from Anthropic at $21 billion in 2026 and $42 billion in 2027. In September, Hock Tan stated that in fiscal year 2027, Anthropic is expected to become Broadcom’s largest customer for custom chips and retain that status in 2028. Previously, Google was considered the largest customer.

This article was AI-translated and verified by a human editor