Broadcom, Apollo, Blackstone launch $35B AI infrastructure platform

Apollo and Blackstone are backing Broadcom's AI chip expansion with $35 billion in private credit, the largest financing of its kind, locking in multi-year demand for the company's custom silicon.

Apollo Global Management and Blackstone committed $35 billion to finance Broadcom's new AI XPV Platform, backing Anthropic's expansion to over 1 gigawatt of compute capacity starting in mid-2026. The platform targets more than 20 gigawatts of total capacity through 2028.

"Broadcom and Anthropic are world-class companies operating at the frontier of technological innovation," Apollo Partner Jamshid Ehsani said. "AI compute is rapidly emerging as one of the most compelling new asset classes in finance, characterized by contracted cash flows, mission-critical utility and a supply-demand dynamic that continues to intensify."

The initial $35 billion tranche, led by Apollo with Blackstone as primary capital partner, will fund Anthropic's previously announced capacity expansion. Apollo was advised by Goldman Sachs, Wells Fargo and Citi, while Morgan Stanley served as lead advisor to Broadcom. The structure pairs Broadcom's custom XPU accelerators and networking solutions with long-term institutional capital drawn across a multi-year schedule.

For Broadcom, the deal arrives at a moment of peak momentum in its AI business. The company reported record AI semiconductor revenue of $10.8 billion in its fiscal second quarter, with total semiconductor solutions revenue jumping 79 percent year over year to $15 billion. AI semiconductor bookings exceeded $30 billion, signaling that hyperscaler demand remains on an upward trajectory. Broadcom's operating margin expanded 200 basis points to a record 67.3 percent, even as consolidated gross margin dipped to 77.1 percent — a shift driven by the higher mix of lower-margin custom accelerators in the revenue stack.

The New Infrastructure Finance Model

The XPV Platform represents a structural shift in how AI infrastructure gets funded. Rather than relying solely on hyperscaler balance sheets, the model channels institutional capital from firms like Apollo, which manages $1.03 trillion in assets, directly into compute capacity. Apollo described the platform as "a new model for mobilizing institutional capital at the scale required to meet the infrastructure demands of AI innovation."

The financing structure mirrors a broader trend. Alphabet announced an $80 billion equity capital raise on June 1 to fund AI infrastructure, and Broadcom's multi-year agreement to supply multiple generations of Google's Tensor Processing Units provides long-term revenue visibility. Google's TPU installations dedicated to Anthropic are forecast to approach 1 GW in 2026 and exceed 3 GW by 2027, according to Broadcom's CEO. OpenAI plans to deploy over 1 GW of its initial generation chips by 2027 as well.

What It Means for Investors

Broadcom shares rose 3 percent in pre-market trading on the news. The stock, valued at roughly $2.28 trillion, trades at 42 times forward earnings — a premium to the semiconductor sector median of 27 times. But the company's free cash flow generation of $10.3 billion in a single quarter and its $10 billion share repurchase program provide a cushion against valuation concerns.

The deal also strengthens Broadcom's competitive position against Nvidia in the custom silicon market. While Nvidia dominates the general-purpose AI GPU market with its H100 and Blackwell architectures, Broadcom's custom ASIC approach — designing chips tailored to specific hyperscaler workloads — has won long-term commitments from Google, Meta and now Anthropic through the XPV Platform. VMware Cloud Foundation version 9.1, which supports GPUs and accelerators from Nvidia, AMD, Intel and Google alongside Broadcom's own chips, further deepens the company's moat in enterprise AI infrastructure.

Of 42 analysts covering Broadcom, 34 rate it a Strong Buy with a mean price target of $484.54, implying roughly 18 percent upside from current levels.

This article is for informational purposes only and does not constitute investment advice.