Broadcom, Apollo, and Blackstone announced the joint establishment of the “AI XPV Platform,” aiming to provide financing support for over 20 gigawatts (GW) of global AI computing capacity by 2028. Buoyed by this news, $Broadcom (AVGO.US)$ U.S. stocks rose nearly 3% at the open and are now up nearly 1%; $Blackstone (BX.US)$ Up over 5%, $Apollo Global Management (APO.US)$ climbing nearly 4%.
According to a June 9 report, the platform’s inaugural transaction totals $35 billion, led by Apollo with participation from Blackstone’s credit and insurance businesses, to support Anthropic’s expansion plan for over 1 GW of computing infrastructure. This deal ranks among the largest private credit special purpose vehicle (SPV) transactions to date, highlighting the rapidly escalating demand for AI infrastructure financing.
Broadcom CEO Hock Tan stated that the company aims to connect “investment partners with the strongest balance sheets” to the goal of “delivering ample computing power at the lowest possible cost and scale,” positioning this collaboration as “the first of many future transactions.”
The AI XPV Platform plans to deliver over 20 GW of computing capacity to leading AI labs by 2028, featuring XPU and networking solutions optimized for low cost and low energy consumption to achieve the lowest per-token delivery cost. Hock Tan’s remarks indicate that, as capital expenditure demands in the AI sector continue to grow, similarly sized private credit SPV transactions are expected to become increasingly common.
Three-tier financing structure: Broadcom guarantee leverages low-cost senior debt
According to the Financial Times, the financing was led by Atlas SP Partners, an affiliate of Apollo, and structured through a special purpose vehicle (SPV), raising capital via a mix of debt and equity to purchase chips and lease them to Anthropic, with debt repayment primarily backed by cash flows from the lease agreements.
The total debt is structured in three tranches:
Senior tranche: $600 million in Class A1 notes were sold to banks at a rate of 100 basis points over U.S. Treasury yields; $24 billion in Class A2 notes were sold to institutional investors in the asset-backed credit market at a yield of 5.75%, with buyers including Athene, Apollo’s insurance subsidiary. Both senior note classes received private credit ratings within the mid-investment-grade range.
Subordinated tranche: $4.5 billion in junior debt, unguaranteed by Broadcom, carries an interest rate of 8.5% and was issued at a discount of 98–99 cents on the dollar.
Equity layer: Atlas SP Partners’ structured finance division provided $800 million in equity, effectively becoming the holder of the SPV.
The key reason senior notes can achieve financing costs significantly lower than those of subordinated debt lies in the “residual value support” agreement provided by Broadcom: if Anthropic continues to be unable to pay rent, the SPV will sell chips to repay debt; if the proceeds from chip liquidation are insufficient, Broadcom will cover the full shortfall for Class A1 and A2 investors. This mechanism effectively aligns the credit quality of the senior notes with that of Broadcom itself, rather than with Anthropic. In contrast, subordinated debt—lacking backing from an investment-grade guarantor—carries a cost of capital approximately twice that of the senior tranche.
Editor/Jayden