Apollo and Blackstone Finalize Record $35 Billion Private Credit Financing for Anthropic
In one of the largest private credit transactions on record, Apollo Global Management and Blackstone have finalized a massive $35 billion debt financing package for Anthropic PBC. The capital will fund a special-purpose vehicle (SPV) to buy Google’s custom Tensor Processing Units (TPUs), which Anthropic will lease to support its rapid expansion of AI computing capacity.
The deal features a unique structural backstop from Broadcom, which has agreed to guarantee the residual value of the chips. If Anthropic defaults on its lease payments and the chips are sold for less than the debt owed, Broadcom will cover the shortfall for the senior tranches. This arrangement has secured investment-grade private ratings for the senior debt, significantly lowering Anthropic's borrowing costs.
Key Financial Structure
- Total Financing: $35 billion, structured across three debt tranches.
- Tranche A1: $6 billion in senior notes, sold to banks at a spread of 1 percentage point over Treasuries, supported by Broadcom.
- Tranche A2: $24 billion in senior notes, carrying a 5.75% coupon, supported by Broadcom.
- Tranche B: $4.5 billion in junior notes, carrying an 8.5% coupon, without Broadcom support.
- Syndication: Approximately half of the total debt has been syndicated to outside institutional investors.
This landmark deal highlights how AI capital expenditure is shifting from traditional venture equity to highly structured, multi-billion-dollar private credit and asset-backed lending models, allowing frontier labs to finance massive compute clusters without diluting equity.1
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An instance of The AI hardware supply chain is shifting from venture equity to asset-backed private credit financing. — The structure of Apollo and Blackstone's $35 billion debt vehicle demonstrates how scaling hardware infrastructure is moving completely onto private credit lines in lieu of venture equity rounds. ↩︎