Broadcom Eyes Over $50 Billion to Fund OpenAI’s Custom AI Chips as Oracle Also Pursues Major Chip Financing: Report

Broadcom Inc. (NASDAQ:AVGO) is reportedly pursuing more than $50 billion to finance custom artificial intelligence (AI) chips for OpenAI, while Oracle Corp. (NYSE:ORCL) separately seeks funding for a large-scale chip purchase.

Broadcom recently discussed financing with Apollo Global Management Inc. (NYSE:APO) and Blackstone Inc. (NYSE:BX), the Wall Street Journal reported, citing people with knowledge of the matter. The proposed financing could support several gigawatts of chip capacity for OpenAI.

The financing will help fund computing hardware as AI data centers expand, with Broadcom and OpenAI expecting the deal to close by year-end. Discussions remain preliminary, and the final amount could change, according to the report.

Notably, Broadcom and OpenAI previously introduced Jalapeño in June as OpenAI’s first custom processor designed for large language model inference. According to the WSJ, OpenAI’s internal chip initiative, known as Nexus, includes custom processors named after peppers. Its first two generations are Jalapeño and Serrano.

Separately, Oracle is negotiating with Apollo and Goldman Sachs Group Inc. (NYSE:GS) to raise money for a substantial chip purchase, the publication reported.

Broadcom, OpenAI and Oracle did not immediately respond to Benzinga’s request for comments.

Big Tech Leans On Debt For AI Chips

AI infrastructure spending is increasingly being financed through large debt deals and strategic investment partnerships, as companies seek funding to secure advanced computing capacity. One example of this is Broadcom expanding beyond custom AI chip development by also helping finance Anthropic’s computing needs.

Broadcom has reportedly agreed to provide up to $42 billion in lending, while Anthropic has committed to a five-year, $125.2 billion lease for Google Tensor Processing Units, or TPUs, capacity. Broadcom is also partially guaranteeing a $60 billion debt package being syndicated by banks, potentially helping reduce Anthropic’s borrowing costs.

A report on Tuesday indicated that SpaceX (NASDAQ:SPCX), led by Elon Musk, was reportedly planning to raise about $40 billion, which includes nearly $10 billion in bank loans and $30 billion in investment-grade debt, led by Apollo, to purchase chips from NVIDIA Corp. (NASDAQ:NVDA). The transaction is expected to close in 2027.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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