Broadcom’s AI Growth Story Faces a $161 Billion Anthropic Test

What really happened in Washington? (From Porter & Company)

Semiconductor giant Broadcom (NASDAQ: AVGO) has become one of the top breadwinners in custom silicon, positioning itself as NVIDIA’s (NASDAQ: NVDA) key competitor in AI chips. However, Broadcom’s XPU customer base is undergoing a very significant shift. Alphabet (NASDAQ: GOOGL) has long been Broadcom’s largest XPU customer, but if all goes according to plan, that will not be the case in 2027. Broadcom has explicitly said that Anthropic is on track to become its largest customer next year and sustain that position in 2028.

However, Anthropic has a problem that Alphabet does not; it is just now starting to generate profits. This raises questions about the company’s ability to actually pay Broadcom when the bill comes due. In this context, investors just received a critical piece of information to analyze: Anthropic’s confidential IPO prospectus. Diving into the details helps provide a better sense of Anthropic’s ability to make good on its commitment to Broadcom.

Anthropic’s IPO Prospectus and the $161 Billion Broadcom Commitment

According to a confidential IPO prospectus seen by Reuters, Anthropic has $161.2 billion in Broadcom-related equipment lease obligations. These obligations are non-cancelable except in the case of a default. While this provides significant visibility for Broadcom, it doesn’t guarantee payment. If Anthropic faces severe funding difficulties, it could stop making lease payments, and Broadcom could resell the related AI racks. Additionally, its commitments toward Broadcom are not the only ones to consider. The company also has overall cloud, computing, and infrastructure obligations of $518 billion that it needs to fund.

In 2025, Anthropic’s revenue grew 12-fold to $4.6 billion. However, its operating loss more than doubled from $2.98 billion in 2024 to $8.06 billion in 2025. Additionally, the report notes that Anthropic’s cash, cash equivalents, and short-term investments as of the end of 2025 were just $20.28 billion. However, the company also raised $65 billion in a May funding round, which could place its current cash balance much higher than $20.28 billion. Nonetheless, its cash would still be far below its spending commitments.

Other reports indicate that Anthropic’s annual revenue run rate has increased by seven times in 2026 to around $65 billion. Additionally, the company’s adjusted operating profit in Q2 was reportedly just $559 million, or a 5.1% margin.

This makes it evident that the company cannot pay for its commitments based on its current operating profits. In turn, it will need to draw on other funding sources to fulfill these obligations.

Anthropic’s Funding Sources: IPO Proceeds and the AI XPV Platform

There are several key levers Anthropic can pull to fund its huge AI infrastructure commitments. This includes the capital raise expected from its IPO. Anthropic is reportedly targeting a $2 trillion valuation and seeks to raise up to $100 billion in cash. Clearly, this would contribute significantly to funding its $518 billion in commitments, but a massive gap would still exist.

This makes the AI XPV Platform, which Broadcom announced in partnership with Blackstone (NYSE: BX) and Apollo Global Management (NYSE: APO), critical to bridging the gap as Anthropic pursues longer-term profitability. The firms have already launched the initial $35 billion tranche of this vehicle, which will support an over-1-GW deployment.

Under this agreement, an Apollo-managed investment fund pays Broadcom for the chips as Anthropic deploys them, and then receives payments from Anthropic over time as it leases the racks. Broadcom also provides a backstop where, if Anthropic doesn’t pay, it pays Apollo’s investors a portion of the difference. That backstop is considerable, at a maximum of $29 billion for the first tranche. Broadcom expects Anthropic to deploy 15 GW of its chips in 2027 and 2028 combined, implying that the total funding required will be many times higher than the initial $35 billion.

Critically, the initial lease has a five-year term. This gives Anthropic a long runway to grow and improve its profitability in order to make the necessary payments. This is ultimately what the success of the deal rests on. The firm projects revenue of $190 billion to $200 billion in 2028, which could lead to sizable profits if margin expansion progresses.

Anthropic’s IPO: A Key Broadcom Watch Item

Broadcom expects Anthropic to become its largest XPU customer, but the company has over $500 billion in spending commitments.

Anthropic is experiencing extremely rapid growth and has reportedly nudged its way into adjusted operating profitability, putting it on a solid trajectory.

However, Anthropic still has a long way to go to close the gap between its commitments and its cash flow.

In turn, with respect to Broadcom’s outlook, it will be critical to monitor Anthropic’s financials, which will become much easier to monitor and verify after its IPO.

Reports indicate that Anthropic’s IPO could take place after the November mid-term elections.

Read this article online ›