On CNBC on August 21, 2026, reporter Kristina Partsinevelos laid out how Broadcom (NASDAQ:AVGO | AVGO Price Prediction) is arranging to finance the next wave of AI chip deployment without putting the debt on its own books.
She said Broadcom is in talks to raise more than $60 billion in debt, potentially reaching close to $70 billion or even $100 billion in total, using a special-purpose vehicle that buys the chips and leases them back to customers like Anthropic.
The more consequential number sits behind the headline financing. “Bank of America estimates that exposure could reach $370 billion by 2029, while calling the likely loss though manageable. It’s not alone. Nvidia is doing a similar thing on a bigger target, more than $500 billion.”
Broadcom shares closed at $368.45 on Friday, down 6.24% for the week, while NVIDIA (NASDAQ:NVDA) closed at $214.72. Both stocks have sold off this week as the market digests the financing structure.
What a Guarantee Actually Obligates Broadcom to Do
A special purpose vehicle is a separate legal entity created for one job, in this case buying chips and leasing them to an AI lab. The borrowing is within the SPV, so Broadcom’s audited liabilities do not include it.
Partsinevelos described it clearly: “The debt doesn’t necessarily land on Broadcom’s balance sheet. A separate entity raises the money, an SPV buys the chips, and then leases it back to the customer. Broadcom’s job is to guarantee part of that debt, and that guarantee is where the risk sits.”
A guarantee is a promise to pay if someone else cannot. “Broadcom isn’t lending the money yet. It’s on the hook if customers can’t pay down the line.”
Broadcom already carries roughly $64.9 billion in short plus long-term debt against $19.63 billion in cash, so the guaranteed exposure would sit atop a balance sheet already levered by the VMware acquisition.
Why “Manageable” Depends Entirely on Correlation
Bank of America’s word “manageable” is doing a lot of work, because a guarantee is manageable in exactly the conditions where it is unlikely to be called, and unmanageable in the one scenario where it would be.
If AI demand keeps compounding, lease payments arrive on time, the SPV services its debt, and Broadcom never writes a check. Hock Tan has said visibility runs through 2028, and AI bookings last quarter exceeded $30 billion, with $10.8 billion shipped.
The problem is what Partsinevelos flagged at the end: “While compute is scarce, the question is what happens the day the industry just builds too much, when there’s no one left to lease to, and the guarantees actually come due at once.”
Because NVIDIA is running the same playbook at a larger scale, the risk is correlated across the industry rather than diversified across unrelated borrowers. One AI demand shock would hit every guarantor simultaneously, which stretches the ordinary meaning of “manageable” in credit analysis, and it is the exact setup our free bubble survivor’s handbook is built around: how to ride the mania while planning the exit.
Does Hock Tan’s Pushback Hold Up
Tan has resisted the backstop framing, telling analysts on the June 3, 2026 call that Broadcom is “creating the AI XPV platform with Apollo and Blackstone and other leading investors to deploy more than 20 gigawatts of compute capacity through 2028” and that the first tranche is $35 billion.
His argument is that partnering with the strongest balance sheets around is not the same as guaranteeing a customer’s loan, and it is true that Apollo and Blackstone bring capital Broadcom would otherwise supply itself. That part is fair.
The pushback is weaker on the guarantee itself, which is disclosed in the 8-K filed on June 3, 2026, as material, and appears in the risk factors under “significant indebtedness requiring substantial cash flow for debt service.” An obligation you promise to honor is an obligation, regardless of which entity holds the paper.
The specific thing to watch is the credit spread on this SPV paper as new tranches price, alongside the pace of new leasing commitments. Partsinevelos noted spreads have widened in recent months, and Reddit sentiment on AVGO has flipped from a bullish 75 in early August to a bearish 38 this week, suggesting the market is beginning to price the tail risk that Bank of America is calling manageable.
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