Broadcom's credit default swap spread — the price investors pay to insure against the company defaulting on its debt — spiked to a record 122 basis points after the announcement of a colossal off-balance-sheet debt structure that could reach roughly $100 billion in total borrowing capacity, one of the most audacious financing moves in tech history. In practical terms, a 122-basis-point spread means paying roughly $122,000 a year to insure $10 million of Broadcom debt.

The deal, first reported by Bloomberg on August 20, has Broadcom negotiating more than $60 billion in senior secured debt channeled through special-purpose vehicles (SPVs), with an additional junior tranche of approximately $30 billion layered on top. The purpose: purchasing and leasing custom AI chips to major customers, including Anthropic.

Inside the $100 billion debt machine

Special-purpose vehicles are standalone legal entities whose assets and liabilities are kept separate from a sponsor's main balance sheet, a technique long used in structured finance. They have recently become a favored channel for AI infrastructure funding: in October 2025, Meta closed a roughly $27 billion SPV financing with Blue Owl Capital for its Hyperion data center in Louisiana, reported at the time as the largest private-capital financing of its kind, and Oracle has increasingly leaned on bond markets to fund its data-center buildout.

Broadcom is using the same machinery to keep this mountain of debt off its own balance sheet. The senior-secured tranche of $60 billion to $70 billion carries partial guarantees from Broadcom itself, while the junior tranche of roughly $30 billion sits inside the SPVs without the same level of backing.

The transaction builds on a partnership Broadcom struck in June 2026 with Apollo Global Management and Blackstone. That earlier agreement, focused on expanding Anthropic's compute capacity using Broadcom's chip technology, involved an initial investment of approximately $35 billion. The new arrangement dramatically escalates both the ambition and the leverage. Analysts have speculated that by 2029, the total senior debt capacity within this structure could expand into the hundreds of billions.

Credit markets reprice the risk

The 122-basis-point CDS spread represents a meaningful repricing of risk. Bond spreads have widened by 20 to 45 basis points relative to industry peers, according to Bank of America analysts, who specifically flagged rising contingent liabilities as a factor affecting Broadcom's credit ratings. Some rating agencies have already adjusted their assessments. That sensitivity is heightened by the debt Broadcom already carries on its own balance sheet from its $69 billion acquisition of VMware, completed in 2023 and funded largely with new borrowing — one of the largest technology acquisitions ever financed substantially with debt.

The AI revenue bet behind the leverage

Broadcom's projection that AI-chip revenue will exceed $100 billion in fiscal 2027 marks a dramatic bet on the trajectory of enterprise AI adoption — a figure significantly surpassing its previous total annual revenue.

Anthropic, one of the most well-capitalized AI labs in the world, is among the major buyers that would lease chips through this structure. Anthropic has separately committed to tens of billions of dollars in compute spending, including an expanded agreement with Amazon Web Services worth up to $38 billion announced in November 2025. The June 2026 partnership with Apollo and Blackstone established the template: private capital provides the funding, Broadcom provides the chips and the guarantees, and the AI companies gain compute capacity without bearing the full upfront cost.

The entire structure depends on AI chip demand remaining robust enough to service debt payments on tens of billions in borrowing. If the AI spending cycle cools, or if a major lessee such as Anthropic restructures, the contingent liabilities come home to roost on Broadcom's actual balance sheet.