Broadcom’s AI Financing Could Reach $370 Billion. But It’s Not as Bad as It Sounds.
Broadcom (AVGO -0.14%) shares fell 5.9% on Friday, closing at about $393 — nearly 21% below their 52-week high. The drop capped a difficult week for the tech sector. Among the week’s unwelcome news was a downgrade aimed not at Broadcom’s earnings but at its debt.
Early last week, Bank of America reportedly downgraded Broadcom’s bonds to market weight — the firm’s equivalent of a neutral. The reported reason was a new platform Broadcom built with Apollo Global Management and Blackstone to finance customers’ artificial intelligence (AI) data centers.
The headline number from the note: the financing behind the platform could reach $370 billion by mid-2029, with Broadcom reportedly guaranteeing much of it.
A number that size deserves scrutiny. But I’d argue it also deserves context, because $370 billion isn’t what Broadcom owes, and it isn’t what Broadcom has signed.
The company’s own quarterly filing caps the maximum it can lose on the platform’s first transaction at $29 billion. Even the bank’s analysis reportedly puts the modeled worst case for the full platform (every customer defaulting at once) at about $42 billion.
Image source: Getty Images.
The $370 billion math
That platform launched in June, when Broadcom, Apollo, and Blackstone announced what they call the AI XPV Platform, starting with a $35 billion financing package led by Apollo. It’s designed to enable more than 20 gigawatts of compute capacity for frontier AI labs through 2028.
Anthropic and OpenAI are the named customers, with Anthropic’s first phase covering more than 1 gigawatt of compute starting in mid-2026.
In short, outside investors buy the AI racks built on Broadcom’s custom chips, the AI lab leases them, and Broadcom stands behind much of the financing. The chipmaker keeps booking enormous orders without its customers needing hundreds of billions of dollars up front.
The $370 billion is what Bank of America’s analysts reportedly get when they model the platform scaling all the way to its 20-gigawatt design. By mid-2029, the financing stacked across those deals (much of it carrying Broadcom’s guarantees) could reach that figure. It’s a ceiling on hypothetical future commitments, not debt on Broadcom’s balance sheet.
The same analysis reportedly estimated that if every customer defaulted, Broadcom’s losses would be about $42 billion. At a 25% default rate, the reported figure is about $10.5 billion. Those modeled losses, unlike the filing’s cap, assume Broadcom recovers some value on the racks.
What Broadcom has signed
Broadcom’s latest 10-Q filing describes the commitment that exists today. On June 8, the company arranged for an investor partner to take on agreements to purchase AI racks based on Broadcom’s custom AI accelerators, plus the related customer leases. Broadcom agreed to backstop that customer’s lease payments over five-year terms. The backstop grows as racks are deployed, shrinks as the customer pays, and tops out at $29 billion. If the customer defaults, Broadcom can take over the lease or sell the racks, either of which would reduce the loss.
That makes the filing’s figure a cap, not a forecast. For Broadcom to lose the full $29 billion, its customer would have to stop paying entirely and the racks would have to be worth almost nothing.
For perspective, Broadcom earned $9.3 billion in its fiscal second quarter of 2026 (the period ended May 3, 2026), up 88% year over year, on revenue that rose 48% to $22.2 billion. And the growth is accelerating — management guided for fiscal third-quarter revenue of about $29.4 billion, up about 84%. A total wipeout on the first transaction would equal about nine months of profits at the current pace — painful, but nowhere near $370 billion.
Today’s Change
(-0.14%) $-0.56
Current Price
$392.43
Key Data Points
Market Cap
Day’s Range
$391.31 – $399.36
52wk Range
$281.87 – $495.00
Volume
19.3M
Avg Vol
25.7M
Gross Margin
65.66%
Dividend Yield
0.65%
The number that grows
Sure, today’s cap is $29 billion. But it covers only the first deal. The platform is designed to reach more than 20 gigawatts, and if Broadcom backstops each new deal the same way, the committed number will likely keep climbing. That is how the bank’s model reportedly gets to $370 billion.
The customers behind those leases are private AI labs, and their lease payments depend on the AI build-out staying funded. Broadcom is, in effect, helping finance the demand for its own chips.
At about $393 as of this writing, shares cost about 65 times earnings and about 25 times the coming year’s expected profits. Even after Friday’s drop, the price is built on the AI ramp continuing for years to come.
Ultimately, the risk I’d weigh isn’t the $370 billion ceiling, which describes deals not yet signed. It’s that Broadcom’s growth now leans partly on guarantees the company extends to keep that ramp going. For now, the number Broadcom has committed to is $29 billion, and each new deal Broadcom backstops will add to it.
