Anyone who has financed a new car knows the automaker often wants to write the loan, too. Its lending arm keeps factories busy by making the purchase affordable. The model works because risk is spread across millions of drivers.
Broadcom Inc. (AVGO) is building its own version of that model for artificial intelligence. Its list of borrowers, however, is far shorter than expected.
On Monday, October 12, 2026, CEO Hock Tan said capital, not chips, will be the biggest constraint on AI growth. At a conference in Singapore, Tan said memory and wafer shortages are easing, according to CNBC. “[What] I think might be the biggest constraint is capital,” he said.
That warning comes from a company already writing checks. Broadcom has agreed to lend Anthropic up to $42 billion, Reuters reported, citing Anthropic’s IPO filing. That could cover about a third of a $125.2 billion, five-year compute lease on chips Broadcom helps design, the filing showed.
OpenAI is next in line. Broadcom is working to arrange more than $50 billion in financing for the custom chip it is building with OpenAI, The Wall Street Journal reported. Its banks are also gathering $60 billion of chip financing for Anthropic and others, according to Bloomberg.
Also read: Broadcom CEO delivers blunt verdict on AI’s biggest debate right now
Tan is describing his own business model
Broadcom designs custom AI processors, the main alternative to Nvidia Corp.’s (NVDA) standard graphics chips, plus the networking gear that links them. Custom chips can cut costs for buyers but demand huge commitments before any payoff.
That makes Tan’s comment read less like a warning and more like a sales strategy. He told analysts in September that only two of Broadcom’s six major AI chip customers need financing: Anthropic and OpenAI, Benzinga reported.
Demand is not the problem. Tan said the industry wants more computing capacity than it can supply, possibly into 2030, according to CNBC. When buyers line up without cash, the seller with the stronger balance sheet wins the order.
Broadcom’s backstop risk rests on two borrowers
Broadcom’s latest quarterly filing shows a backstop on one customer’s AI rack leases worth up to about $29 billion. If that customer defaults, Broadcom covers the gap between 85% of the amount owed and the racks’ resale value, the filing states.
Here, the car loan comparison breaks down. An auto lender can absorb a few bad loans among millions. Broadcom’s book relies on two labs that, by Tan’s own account, need external capital to keep growing.
Anthropic is expected to become Broadcom’s largest compute customer in 2027, according to Reuters. Its IPO filing flags potential conflicts of interest in Broadcom’s dual role as supplier and lender. A lender whose biggest borrower is also its biggest customer has little room to walk away. Anthropic’s appetite for compute also stretches beyond Broadcom, adding claims on its cash.
Nvidia runs a similar playbook. In August, it teamed with six finance firms to mobilize more than $500 billion for AI, partly to fund customers’ chip purchases, Bloomberg reported. Broadcom’s version is far more concentrated.
Broadcom stock trades well below its June record
Broadcom has a market value of about $1.73 trillion, ranking among the trillion-dollar companies. That size puts it in the index funds most investors already own.
The stock hit a record $495 in early June and now trades about 27% below that peak. Its all-time low, about $1.43 split-adjusted, came in November 2009, when it traded as Avago Technologies, according to TradingView.
Shares trade at about 46 times trailing earnings but only about 21 times forward earnings, according to Stock Analysis. That gap shows how fast analysts expect profits to grow.
Of 50 analysts tracked by Stock Analysis, 40 rate the stock a Strong Buy, seven a Buy, and three a Hold. Their average target of about $531 implies roughly 47% upside, Stock Analysis data show.
The gap between targets and price suggests investors are discounting credit risk that revenue models miss.
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Credit markets are becoming AI’s new supply chain
Tan said the industry overcame a series of bottlenecks over the past two years, according to CNBC. Money behaves differently because lenders can pull back faster than factories can be built.
That changes how chipmakers compete. Broadcom is now judged on the credit it can safely extend, not just on its chips. Skeptics already warn of an AI spending reckoning, and each new loan raises the stakes.
The next test is the $18 billion junior slice of the package Bloomberg reported, which Blackstone Inc. (BX) is leading. Junior debt is repaid last, so its pricing will show what lenders think AI lab credit is worth.
Automakers learned long ago that a lender is only as strong as its borrowers. Broadcom is learning the same lesson with far fewer of them.
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