Apollo and Blackstone are in talks to provide about $35 billion in financing to Broadcom.

```

Apollo Global Management and Blackstone Group are in negotiations to provide approximately $35 billion in financing to Broadcom, which, if finalized, would become one of the largest private credit deals in history.

According to media reports, the financing will be used to support Broadcom’s development and construction of its AI chip business, including a long-term agreement to customize tensor processing units (TPUs) for Google. Negotiations are still ongoing and terms may vary.

Broadcom CEO Hock Tan stated in March this year that the company expects its AI chip sales to surpass $100 billion next year. If this financing goes through, it would further solidify the private credit sector’s position as a core funding source for AI infrastructure construction.

Broadcom’s stock price rose 3.75% during the day.

Record-Breaking Financing to Fuel TPU and AI Chip Expansion

This approximately $35 billion financing is set to break historical records in the private credit market.

Last year, Meta Platforms reached a nearly $30 billion data center financing agreement with Blue Owl Capital and Pacific Investment Management Company, previously considered a landmark deal in the market.

In April this year, Broadcom disclosed in regulatory filings that it had signed a long-term agreement with Google to develop and supply customized TPUs, along with a separate agreement to provide network and other components for Google’s next-generation AI racks, with contracts running through 2031.

Additionally, Broadcom announced expanded cooperation with both Google and Anthropic, planning to provide Anthropic with an additional 3.5GW of next-generation TPU computing power starting in 2027. At that time, Broadcom also stated that all parties were in discussions with financial partners regarding deployment support.

AI Capital Expenditure Surges, Broadcom at the Core of Beneficiaries

Funding needs for AI infrastructure are accelerating rapidly.

The four major hyperscale data center operators are expected to invest up to $725 billion in total this year on AI data center equipment and related capital expenditures, exceeding previous forecasts. This week, Meta is preparing around $13 billion in financing for its data center in El Paso, Texas.

In the AI chip market, Nvidia remains the largest supplier of accelerated computing chips.

Broadcom, with its customized semiconductor path, has positioned itself as a key alternative in the market and has signed custom AI chip agreements with companies such as OpenAI, driving up its company valuation substantially. If these financing negotiations are successful, Broadcom will gain crucial funds to further expand its production capacity and strengthen relationships with major cloud clients.

Blue-Chip Investment Opportunity as Private Credit Continues Expanding

As an investment-grade company, Broadcom is not a traditional customer for the private credit market—which has historically been known for providing loans to lower-rated companies. However, leading private capital institutions have recently accelerated their expansion into blue-chip companies.

In recent years, Apollo has reached multibillion-dollar financing agreements with several high-rated companies, including EDF (Électricité de France) and Intel. Apollo previously stated that investment-grade opportunities could push the total size of the private credit market to $40 trillion.

As for Blackstone, its CEO Steve Schwarzman said at last month’s earnings call that the company’s global data center holdings now exceed $150 billion (including projects under construction), with about $160 billion more in potential pipeline projects under development.

As early as 2021, Blackstone positioned itself in AI infrastructure by acquiring data center builder QTS. Since then, it has made this a core investment theme, covering real estate, infrastructure, private equity, and asset-backed financing business lines.

Risk Disclosure and Disclaimer ClauseThe market carries risk and investments require caution. This article does not constitute personal investment advice and does not take into account the unique investment goals, financial circumstances, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investment decisions made based on this information are at your own risk. ```