Monologue: Anthropic's $413bn Burden

Anthropic has $413 billion in non-cancelable compute contracts and chip leases across Google, Amazon, Microsoft, and Broadcom. Of that total, $252 billion is owed to the hyperscalers and $161.2 billion to Broadcom, the company that makes Google’s TPU AI chips. Anthropic is Broadcom’s largest customer for those chips by a wide margin. The arrangement works like this: Anthropic buys the chips, puts them in Google data centers, and then pays Google to rent them back. In a story published the morning of October 1st, Reuters also revealed that Broadcom had agreed to lend Anthropic $42 billion to finance purchases of those TPU chips—though the loans are structured as leases, they are effectively purchases. This is the first example in the AI bubble of dot-com-style vendor financing, where a company lends another company the money to pay them. The contract allows Broadcom to convert the debt into Anthropic shares, which the host calls “an interesting escape hatch for the inevitable point at which the AI lab can’t actually afford its bills.” Broadcom itself reportedly needs to raise $60 to $100 billion a day, and the $42 billion loan would only cover about a third of what Anthropic owes Broadcom, meaning the rest must come from elsewhere.

The cash flow problem