What the Journal reported
Broadcom has spent recent weeks trying to arrange more than $50 billion in financing for the custom AI chip it is building with OpenAI, the Wall Street Journal reported on 7 October, citing people familiar with the talks. Apollo and Blackstone are among the lenders approached.
The talks are early and the size could change. The financing is expected to close before the end of the year and could cover several gigawatts of OpenAI chip capacity, according to the report, summarised by investingLive.
OpenAI’s chip programme is called Nexus internally, with first- and second-generation parts named Jalapeño and Serrano. It follows the partnership announced a year ago to co-develop 10 gigawatts of custom chips using Broadcom’s networking technology, with deployment running from the second half of 2026 through 2029.
Oracle and SpaceX are doing the same thing
Oracle is in talks with Apollo and Goldman Sachs to fund a large chip purchase, hoping to finalise a deal this year and still speaking to other potential partners. The likely structure is a separate entity that buys the chips and leases them to Oracle, which keeps the debt off Oracle’s own balance sheet.
The number of chips is not clear. The Journal noted that Nvidia chips for a single one-gigawatt data centre would cost tens of billions of dollars.
SpaceX has discussed a $40 billion financing for Nvidia chips with lenders. The Journal attributed the first report of those talks to the Financial Times.
Why it is leaving the bond market
The cloud providers used to pay for hardware out of cash flow. For the AI build-out they issued hundreds of billions of dollars of bonds, which the Journal said pushed public debt markets to their limits. The next tranche has to come from somewhere else, and private credit is where it is going.
The other half of the explanation is on the borrower side. OpenAI and Anthropic do not have balance sheets that let them buy hardware outright. They have mostly rented compute from cloud providers, and both now want to own more of it, to cut costs and to reduce how much of their future depends on somebody else’s capacity plan.
What this means in practice
A chip-leasing vehicle funded by private credit does three things at once. It gets the hardware bought, it keeps the debt off the operating company’s books, and it moves the risk to lenders who do not have to mark it to a public market every day.
That last part is the one worth watching. Last week Broadcom launched a separate $60 billion debt financing for chips destined for Anthropic, with banks selling senior secured loans backed by Broadcom’s own creditworthiness. The structures are becoming routine faster than anyone has had a chance to see one of them through a downturn.
What to watch
Whether Broadcom and Oracle close before year-end, as both reportedly want to. The terms matter more than the headline numbers: who holds the residual risk on chips that depreciate on a three-year cycle, and what happens to the lease if the tenant’s compute demand does not arrive on schedule. None of these are completed deals. They are talks, reported by people familiar with them, and the sizes may move.
