Broadcom Is Raising $100 Billion It Will Not Book as Debt

The Hundred Billion Dollars That Will Not Show Up on the Balance Sheet

On the evening of August 20, Bloomberg reported that Broadcom was in talks with a group of lenders to raise more than $60 billion. The next day CNBC raised the figure: the negotiation had passed $70 billion, and the full package could reach $100 billion. If it closes at that size, it will be the largest borrowing ever done through a single special-purpose vehicle.

Broadcom's market value is $1.75T. As of the end of June, its balance sheet carried $64.9B of debt. The new borrowing under discussion does not get added to that number, because the borrower is not Broadcom. It is a structure assembled by Apollo and Blackstone. What Broadcom is doing is not taking on debt. It is putting its signature on one slice of somebody else's.

The stock closed Friday, August 21 at $368.45, up 1.21%. The same stock traded at $432.70 in July. That gap did not open with this week's headlines; the repricing on the credit side has been running for weeks.

Three of those four numbers appear in Broadcom's financial statements. One does not. The one that does not is the subject of this piece.

XPV: Sells the Chip, Lends No Money, Carries the Risk

The structure was set up on June 9, 2026. Broadcom, Apollo, and Blackstone's credit and insurance business announced a joint financing vehicle called the AI XPV Platform. Apollo-managed funds led a $35 billion capital solution; Wells Fargo acted as global coordinator on the A1 tranche, with BNP Paribas, Citi, and UBS as joint bookrunners. On the A2 tranche, Goldman Sachs, Bank of America, and Morgan Stanley served as placement agents. Apollo's Jamshid Ehsani described the transaction as "the largest private financing ever executed."

The mechanics do not look like a chip sale. Broadcom does not sell the racks to the customer. A special-purpose vehicle buys them, funds the purchase by borrowing in the credit market, and then leases the racks to AI labs. In the first transaction the tenant is Anthropic: roughly one gigawatt of capacity coming online at Fluidstack sites from the middle of 2026. The platform's stated target is more than 20 gigawatts of deployment through 2028.

The Anthropic financing carries the code name Project Big Sky. The vehicle was formed by Atlas SP Partners, Apollo's asset-backed finance arm, and the collateral is the chip lease agreements themselves.

Every link in the chain sits in a different entity. Broadcom appears only in the first box. But if the tenant in the last box stops paying, the bill travels back to the first one.

What a Residual Value Guarantee Is

Broadcom's signature is not on the principal of the loan. It is on the future sale value of the racks. The instrument is called a residual value guarantee, or RVG.

The contract says this: if lease payments stop and the racks are put up for sale, and the sale proceeds fall short of a floor value written into the agreement, Broadcom pays the difference. Until the guarantee is triggered, it does not appear on the balance sheet as a liability. The accounting rule waits for payment to become "probable."

Meta, which uses the same structure for data centers, put it this way in its own filings:

"RVG payments are not probable, and therefore no liability has been recorded to date."

Meta carries roughly $27B of guarantees on the Hyperion project in Louisiana and about $13B on the Sopaipilla project in Texas. Nvidia uses a comparable mechanism inside the $500 billion platform it built with six investment firms; Jensen Huang described it as a commitment that "may provide a residual-value support mechanism for up to 25% of an opportunity."

Mariya Entina of DoubleLine described what the structure does on the ratings side:

"It's like you're really gaming the system here; you're trying to get preferential treatment from rating agencies."

The Mechanism: Who Carries What in One Gigawatt

Tom Curcuruto's model at Bank of America makes the numbers visible.

The last line reveals the model's assumption. Loss moves in direct proportion to the default rate. That holds only if the secondhand price of the racks is independent of the default rate.

It is not. The chip inside these racks is an XPU, an accelerator designed for one customer's software stack. A general-purpose GPU has a resale market; an accelerator drawn for a single customer has a narrow pool of buyers. And in the scenario where the default rate reaches 25%, the racks hitting the secondary market at the same moment are the same racks. Sellers multiply; buyers do not. The gap below the floor value widens faster than a linear model predicts.

BofA's own warning runs along the same line: XPU chips lack a mature secondary market and the product lineup is narrow. Its second concern is tenant concentration — Anthropic is the primary lessee on the first transaction, and OpenAI is possible but unconfirmed.

The chart is here not as proof but to show when the repricing on the credit side crossed over into the equity.

What the Credit Market Priced

S&P Global Ratings called the first tranche credit negative on June 11. That was not a downgrade; Broadcom's A- rating stayed in place. The assessment means the transaction adds incremental risk to the company's credit profile. Inside the structure, roughly $30 billion of senior A1 and A2 notes come with Broadcom's residual value support; a $4.5 billion B tranche does not.

Moody's was more direct, writing that a substantial increase in Broadcom's contingent obligations could create an overhang on the company's credit profile.

On August 14, Bank of America cut its credit view on Broadcom from overweight to neutral. The reasoning was simple: the price was already there. Since early June, Broadcom's bond spreads had widened 20 to 30 basis points against semiconductor peers that carry no AI financing structure.

The comparison peers are Texas Instruments and Qualcomm, neither of which carries an AI financing vehicle. Curcuruto's conclusion: "bond spreads already largely reflect these risks."

Credit derivatives point the same way. On late-July data, Oracle's five-year credit default swap set a record at 215 basis points, up from 144 at the start of the year. Meta's reached 90 basis points; Nvidia, Amazon, and Alphabet sat in a 65–70 basis point band. Broadcom was also in record territory.

Put differently: on the equity side, 49 analysts carry an average price target of $526.30 on Broadcom. On the bond side, the cost of insuring the same company is rising. Two markets look at the same balance sheet and reach different conclusions, because one is pricing growth and the other is pricing repayment priority. That distinction between leverage and bond yields explains why the same headline reads differently in two markets.

The Consolidation Threshold

In accounting terms the real question is when this debt lands on Broadcom's balance sheet.

The rule waits for the guarantee payment to become "probable." As long as tenants keep paying, the figure stays in the footnotes. If tenants stop, both the guarantee payment and the consolidation of the structure into Broadcom's statements come into play.

The gap between those two numbers is a factor of seven. What creates it is not a new investment, a new acquisition, or a new fab. Same racks, same contracts, same tenants. The only thing that changes is which statement the debt sits inside. That is the case for why the footnotes matter as much as the text when reading a balance sheet.

Who Carries What

The asymmetry sits here: the party collecting the revenue upfront is the party carrying the last-in-line risk. That is the familiar shape of vendor financing. What is new is the scale, and the fact that the debt sits outside the balance sheet.

What Is Still Open

All of these figures remain conditional. Talks are ongoing, the amount has been reported anywhere between $60 billion and $100 billion, and the tranche structure varies by source: Bloomberg describes $60–70 billion of senior secured debt plus a junior tranche of about $30 billion, while accounts based on CNBC give roughly $45 billion senior and $35 billion junior. Final terms have not been disclosed.

Broadcom reports fiscal third-quarter results on September 2. The line investors will read is not revenue but the footnote: the current size of the contingent obligation and the scope of the guarantee.

This piece draws on Bloomberg's and CNBC's reporting based on unnamed sources, on press releases from Apollo and Broadcom, on assessments from S&P Global Ratings and Moody's, and on Bank of America's August 14 credit note. The size and tranche structure of the debt talks have not been confirmed by the parties; the reported ranges are given in the text with their sources. Price and spread data are as of the August 21, 2026 close.