Broadcom is in talks to raise more than $60 billion in debt to finance an artificial intelligence chip transaction, according to people familiar with the matter. The company is structuring the deal across two tranches: a senior-secured portion exceeding $60 billion and a junior tranche of as much as $30 billion, though final terms remain unfixed.
Broadcom's 2023 acquisition of VMware cost $61 billion in total, making that transaction the largest capital deployment by the chipmaker to date. A debt financing of the size Broadcom is pursuing would rank among the largest corporate debt raises globally.
Broadcom did not immediately respond to requests for comment. The company has positioned itself as a critical supplier to hyperscalers building out generative AI systems, supplying custom silicon for data centers operated by Amazon, Google, Meta and Microsoft. The company's revenue grew 42 percent year-over-year in the most recent quarter, driven largely by infrastructure demand.
Broadcom and other chipmakers have seen customers demand custom silicon tailored to their specific workloads, a shift from the traditional merchant market model. These bespoke designs require longer lead times and higher upfront engineering costs, pushing customers toward financing arrangements with suppliers or partners.
The debt structure Broadcom is exploring separates risk: senior-secured debt typically carries lower interest rates, while junior tranches command higher yields to compensate investors for subordinated claim on assets. A junior tranche of $30 billion means Broadcom expects to demonstrate sufficient cash flow to service both tiers.
No closing date has been disclosed. The financing would add to existing debt and equity commitments Broadcom has made in recent years. Broadcom's market capitalization stands at roughly $800 billion as of Friday's close, meaning the proposed financing would represent about 8 to 9 percent of its market value.
Broadcom has completed several major capital raises in the past two years to fund research, acquisitions and customer financing. The speed at which these deals now move reflects intense competition among chipmakers to secure hyperscaler contracts. If Broadcom closes this financing by the end of 2026, it would demonstrate sustained investor appetite for debt tied to AI infrastructure plays despite rising interest rates.
