Broadcom Is Arranging $50 Billion-Plus for OpenAI's Custom Chips, WSJ Reports

The AI buildout is outgrowing the bond market. Broadcom has spent recent weeks working to arrange more than $50 billion in financing for the custom artificial-intelligence chip it is developing with OpenAI, The Wall Street Journal reported Wednesday evening, with Apollo Global Management and Blackstone among the lenders it has approached.

Broadcom is turning to Wall Street's private lenders to bankroll the next phase of the AI buildout. The company has spent recent weeks working to arrange more than $50 billion in financing for the custom artificial-intelligence chip it is developing with OpenAI, The Wall Street Journal reported Wednesday evening. Apollo Global Management and Blackstone are among the lenders Broadcom has approached, according to people familiar with the discussions.

The talks are early and the size of the deal could change, according to the people familiar with the discussions cited by the Journal. But Broadcom is aiming to close before the end of the year, and the package could cover several gigawatts of OpenAI chip capacity.

The chips behind the money

The financing would follow a partnership the two companies announced about a year ago to jointly develop 10 gigawatts of OpenAI's custom chips using Broadcom's networking technology, with rack deployments targeted to begin in the second half of this year and the rollout completed by the end of 2029.

OpenAI calls the chip effort Nexus internally and names its generations for peppers; per the Journal, the first two are Jalapeño and Serrano. For OpenAI chief executive Sam Altman, custom silicon is part of a plan to shape more of the infrastructure behind its products rather than renting it all from cloud providers.

Oracle wants the chips without the debt

Separately, Oracle is in discussions with Apollo and Goldman Sachs about funding a large chip purchase, people familiar with the matter told the Journal. The structure under discussion would likely see investors fund a separate company that buys the chips, which Oracle would then lease over time — a way to bridge the gap between paying for hardware and collecting cloud revenue without adding more debt to Oracle's own balance sheet.

The number of chips involved is unclear, but the Journal noted that the Nvidia chips for a single 1-gigawatt data center would cost tens of billions of dollars.

Private credit replaces the bond market

For years, the largest cloud companies paid for servers and chips mostly out of cash flow. That era is over: for their AI buildouts, the companies issued hundreds of billions of dollars of bonds, pushing the public debt market toward its limits. Now some buyers are turning to Wall Street investment firms for purchases totaling tens of billions of dollars per deal.

The shift is structural. In August, Nvidia joined six Wall Street firms — Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR — to build financing platforms aimed at channeling more than $500 billion into AI infrastructure, Reuters reported. And Morgan Stanley estimates AI infrastructure will require $1.5 trillion in external financing by 2028, even as lenders and investors grow more cautious about funding the expansion.

There is also a new class of chip buyer — OpenAI and Anthropic among them — that lacks the balance sheet to buy hardware outright. They historically rented the bulk of their computing capacity from cloud providers; now they want to own more of their own infrastructure to lower costs and reduce dependence.

Not the Anthropic syndicate, not the SpaceX deal

This is distinct from two nearby stories TickerGrove has already covered. On Oct. 3, the desk reported on a separate, Bloomberg-reported $60 billion debt syndicate tied to Anthropic's chips — different counterparty, different structure. And the Financial Times reported Tuesday that SpaceX has spoken with lenders about a roughly $40 billion financing for Nvidia chips, a development TickerGrove covered on Oct. 7. The Journal's exclusive adds the Broadcom–OpenAI and Oracle legs to the wave.

Commitments are the test

Whether these early talks turn into firm lender commitments — and on what terms. The financing wave is also the backdrop to this week's violent bond selloff, as investors price the coming supply of AI-related debt against long-dated yields already at multi-decade highs. Any wobble in AI revenue would now ripple through a wider set of lenders than the bond market alone.