Google moves billions in Anthropic chip risk off its balance sheet
Google has teamed up with Broadcom, Apollo, Blackstone, Morgan Stanley, and several crypto mining companies to finance AI chip sales to Anthropic. The Financial Times describes it as one of the largest infrastructure financing programs in history.
The deals center on Google’s Tensor Processing Units, which the company has developed with Broadcom since 2016. Originally built for Google’s own data centers, TPUs are now sold to outside customers and challenge Nvidia’s dominance of the AI processor market. Google sells the chips in “Pods,” server racks that connect thousands of TPUs into one computing system. Anthropic needs vast amounts of AI hardware but can’t buy the chips itself because it has no credit rating. Banks won’t lend the startup that much money, while the other companies involved also want to keep the hardware off their balance sheets, FT sources say. Google is already spending record sums and doesn’t want to add more strain to its balance sheet. Broadcom also doesn’t want to tie up its capital in the Google chips it resells.Ad Morgan Stanley has helped set up a financing vehicle that buys the chips and leases them to Anthropic. Outside investors, mainly Apollo and Blackstone, put up the money. The structure first goes into use in June, when a special purpose vehicle called Compute SPV buys about one gigawatt of TPU hardware for $35 billion. That works out to roughly one million TPUs, according to the FT. Broadcom provides a backstop covering about $30 billion of the purchase if Anthropic stops making lease payments.AdDEC_D_Incontent-1 The structure now serves as a template for more deals. The largest deal to date is an April agreement covering Google’s sale of another 3.5 gigawatts of TPU hardware to Broadcom for Anthropic. Broadcom’s financial filings list $128 billion in purchase commitments through 2028, and FT sources say nearly all of that amount is tied to Google TPUs. Crypto miners provide the power and data centers Google needs Financing the chips solves only half the problem because Google also needs data centers with enough power to run them. The company is turning to crypto miners that have already secured access to large amounts of electricity.Ad TeraWulf is the first to receive a Google guarantee, which covers a 360 megawatt data center in New York. Morgan Stanley packages the guarantee into a $3.2 billion construction bond, while Google receives an ownership stake in TeraWulf in return.
