Broadcom has agreed to lend Anthropic up to $42B, and Anthropic would spend that money renting AI chips that Broadcom helps build with Google.

The loan could cover about 1/3 of Anthropic's $125.2B, 5-year chip lease, and the debt could later convert into Anthropic shares.

Broadcom can bring in a financing partner, and the debt could convert into Anthropic shares, though Anthropic expects no note sales before its IPO.

Much of that money would flow back to Broadcom, which expects Anthropic to become its largest compute customer in 2027.

Like Nvidia, Broadcom is using its balance sheet to sell chips, having already backstopped senior debt in a $35B Apollo-Blackstone vehicle that leases chips to Anthropic.

Anthropic ofcourse warned that Broadcom's dual role as supplier and lender creates "potential conflicts of interest" that could affect its access to compute.