Apollo and Blackstone have finalised a USD 35 billion private credit deal to finance Anthropic's purchase of Alphabet-developed chips.
The deal, internally referred to as project 'Big Sky', was structured around a special purpose vehicle formed by Apollo's Atlas SP Partners, which raised both debt and equity components. Lease agreements for the chips provide the underlying support for the transaction's value, according to Financial Times.
Tranche structure and credit backing
The financing was split across three tranches. The two senior segments carry interest payments backstopped by Broadcom, which is producing the tensor processing units (commonly known as TPUs) in partnership with Google. Broadcom's agreement to cover interest payments in the event of a shortfall from Anthropic materially reduced the cost of borrowing on those portions.
Approximately USD 6 billion in so-called A1 notes were sold to banks at a rate one percentage point above US Treasuries, while a further USD 24 billion was placed with investors in asset-backed credit markets at a yield of 5.75%. The remaining USD 4.5 billion in junior debt, which does not benefit from Broadcom's backstop and therefore carries greater exposure to Anthropic's credit risk, was priced at an interest rate of 8.5%. Investors in that tranche were also offered an original issue discount of between 98 and 99 cents on the dollar, depending on the size of their commitment. Morgan Stanley advised Broadcom and arranged the transaction.
Market context and IPO positioning
Furthermore, the transaction adds to a growing wave of chip-backed lending that has prompted debate within capital markets over the pace at which graphics processing units may depreciate as AI technology evolves. Anthropic investors participating in the deal were not granted early access to the company's financials ahead of its planned initial public offering, according to people familiar with the arrangement. Some prospective investors declined to participate due to the delayed-draw format of the debt, which can compress yields because funds are drawn down in multiple tranches over time.
The deal closes days after Alphabet completed a large equity offering targeting USD 85 billion to support Google's AI infrastructure build-out, and as Anthropic continues preparations for its own IPO, following a USD 65 billion private financing round. Broadcom's chief executive noted last week that the company aims to connect investors with sufficient balance sheet capacity to deliver computing power at scale and at lower cost, describing the Apollo and Blackstone transaction as the first in an anticipated series of similar deals.
The broader AI financing wave has extended beyond the US, with Amazon raising the equivalent of USD 10 billion through a Canadian dollar bond issuance (reportedly the largest of its kind) underscoring the geographic reach of demand for AI-related capital.
