Broadcom CDS surges to record 122 basis points amid massive off-balance-sheet AI chip debt deal

Broadcom just pulled off one of the most audacious financing moves in tech history, and the credit market’s response was immediate and unflattering. The company’s credit default swap spread, essentially the price investors pay to insure against Broadcom defaulting on its debt, spiked to a record 122 basis points following the announcement of a colossal off-balance-sheet debt structure that could reach roughly $100 billion in total borrowing capacity.

The deal, first reported by Bloomberg on August 20, involves Broadcom negotiating over $60 billion in senior secured debt channeled through special-purpose vehicles. On top of that sits an additional junior tranche of approximately $30 billion. The purpose: purchasing and leasing custom AI chips to major customers, including Anthropic.

The architecture of a $100 billion debt machine

Broadcom is using SPVs to keep this mountain of debt off its own balance sheet. The senior-secured tranche of $60 to $70 billion comes with partial guarantees from Broadcom itself. The junior tranche of roughly $30 billion sits in the SPVs without the same level of backing.

The transaction builds on a partnership Broadcom struck in June 2026 with Apollo Global Management and Blackstone. That earlier deal, focused on expanding Anthropic’s compute capacity using Broadcom’s chip technology, involved an initial investment of approximately $35 billion. The new arrangement dramatically escalates the ambition and the leverage.

Analysts have speculated that by 2029, the total senior debt capacity within this structure could expand to hundreds of billions.

Credit markets aren’t buying the optimism

The 122-basis-point CDS spread represents a meaningful repricing of risk. Bond spreads have widened by 20 to 45 basis points relative to industry peers, according to Bank of America analysts.

Bank of America analysts specifically flagged the rising contingent liabilities as a factor affecting Broadcom’s credit ratings. Some rating agencies have already adjusted their assessments.

The AI revenue bet behind the leverage

Broadcom’s projection that AI-chip revenue will exceed $100 billion in fiscal 2027 represents a dramatic bet on the trajectory of enterprise AI adoption, significantly surpassing its previous total annual revenue.

Anthropic, one of the most well-capitalized AI labs in the world, is among the major buyers who would lease chips through this structure. The June 2026 partnership with Apollo and Blackstone established the template: private capital provides the funding, Broadcom provides the chips and the guarantees, and the AI companies get compute capacity without bearing the full upfront cost.

The entire structure depends on AI chip demand remaining robust enough to service debt payments on tens of billions in borrowing. If the AI spending cycle cools, or if a major lessee like Anthropic restructures, the contingent liabilities come home to roost on Broadcom’s actual balance sheet.