Broadcom in Early Talks to Arrange $50 Billion Financing for OpenAI Custom Chips

Broadcom Inc. (NASDAQ:AVGO) is in preliminary discussions to secure more than $50 billion in debt financing to help OpenAI (NASDAQ:OPENAI) purchase custom artificial intelligence chips. The two companies are co-developing these custom chips, and Broadcom has reportedly approached major private credit lenders, including Apollo Global Management Inc (NYSE:APO) and Blackstone Inc. (NYSE:BX), to participate in the funding package. This proposed arrangement is similar to a previous $60 billion debt facility that Broadcom organized for Anthropic PBC.

The proposed financing is designed to help OpenAI cover the massive upfront costs of purchasing hardware before it can generate revenue from deploying its computing systems. By offering both custom chip design and structured debt financing, Broadcom establishes a significant competitive advantage over traditional suppliers of off-the-shelf graphics processing units. This combination allows OpenAI to manage the massive capital expenditures required for data centers, cooling, and power. The funding will support a custom silicon partnership established in October 2025, which aims to deploy 10 gigawatts of AI accelerators by the end of 2029.

Although the initial orders represent multi-billion-dollar hardware commitments, the current financing talks are in the early stages, and no official agreement is expected before the end of the year. Investors will watch whether Apollo, Blackstone, or other private credit firms finalize the debt facility, as well as the progress of OpenAI's internal "Nexus" chip program, which includes chips codenamed Jalapeño and Serrano.