Big Tech is running out of conventional ways to fund its artificial intelligence obsession. When a startup needs tens of billions of dollars just to rent the silicon needed to stay competitive, standard corporate debt doesn't work. Venture capital rounds, even massive ones, get diluted too fast.
That's why the financial world is staring at Project Big Sky.
Apollo Global Management and Blackstone just finalized a massive $35 billion private credit package to finance Anthropic’s computing expansion. This isn't just another big loan. It's a fundamental shift in how the physical infrastructure of the internet gets funded. By pairing up to create what Broadcom calls the AI XPV Platform, these alternative asset managers are stepping directly into a role that traditional Wall Street banks can't touch right now.
If you want to understand where the real power in the AI race lies, look past the software and follow the hardware financing.
The Anatomy of Project Big Sky
The sheer scale of this deal is hard to overstate. To put $35 billion in perspective, it’s larger than the entire market capitalization of many S&P 500 companies. The money isn't going into a corporate checking account for payroll or marketing. It has one hyper-specific purpose: purchasing Google's custom-developed Tensor Processing Units (TPUs) to fuel Anthropic's race against OpenAI.
The structure relies on a classic financial maneuver engineered for the modern tech era. Instead of lending money directly to Anthropic, Apollo's Atlas SP Partners set up a Special Purpose Vehicle (SPV).
The SPV acts as an insulated corporate island. It raises the capital, buys the chips from Google, and leases them to Anthropic. The cash from those lease payments pays off the debt.
The real magic, however, lies in how the risk is carved up into three distinct tranches:
- The A1 Tranche ($6 billion): Sold directly to commercial banks. It yields a tight 1 percentage point over US Treasuries.
- The A2 Tranche ($24 billion): Placed with institutional investors in the asset-backed credit markets, yielding 5.75%.
- The Class B Junior Notes ($4.5 billion): The risky layer. It carries an 8.5% coupon and an original issue discount of 98 to 99 cents on the dollar.
Why Broadcom is the Linchpin
You might wonder why conservative institutional investors would risk billions on a startup leasing highly depreciable tech assets. The answer is Hock Tan.
Broadcom, which helps design these custom Google chips, provided a crucial "residual value guarantee" for the $30 billion across the senior A1 and A2 tranches. If Anthropic misses a lease payment or goes under, the SPV sells the chips. If the market value of those used TPUs falls short of what's owed, Broadcom cuts a check to cover 100% of the difference.
"Our strategic vision is to combine Broadcom's leading technology with the balance sheets of the strongest investment partners to provide sufficient computing power for frontier AI labs at the lowest cost." — Hock Tan, Broadcom CEO
This backstop effectively bridges the gap between speculative tech and investment-grade safety. It gives the senior debt the credit profile of Broadcom without forcing Broadcom to clutter its own balance sheet with $30 billion in direct liabilities.
The Big Gamble on Chip Depreciation
Every seasoned credit investor looking at this deal notices the elephant in the room: technological obsolescence.
Silicon Valley moves fast. A cutting-edge AI chip today can look like a paperweight in three years. If a newer, vastly superior TPU or GPU hits the market next year, the resale value of the current generation plummets.
This reality explains why some institutional investors walked away from Project Big Sky. The deal uses a delayed-draw format, meaning the $35 billion will be pulled down in pieces over 12 to 18 months. For lenders, sitting on committed capital that isn't yet earning full interest drags down overall yields. Combine that with the risk of backing hardware that degrades in value faster than a new car driven off the lot, and it's easy to see why conservative pockets of capital blinked.
Yet Apollo and Blackstone have a different math. They're betting that the demand for raw computing capacity is so desperate that even older generation chips will find eager renters if Anthropic falters. Broadcom’s goal is to deploy 20 gigawatts of computing capacity through this platform by 2028. You don't build that kind of scale without taking a view on asset stickiness.
Private Credit Steals the Crown from Big Banks
This transaction highlights a structural shift on Wall Street. Ten years ago, a massive infrastructure financing deal like this belonged to JPMorgan, Citi, or Bank of America. Today, the mega-caps of private credit are dictating terms.
Traditional banks are bound by strict regulatory capital requirements that make holding giant, unconventional hardware loans incredibly expensive. Private credit funds, pools of capital from pensions, sovereign wealth funds, and insurers, face no such restrictions. They can move faster, hold larger concentrated positions, and engineer complex lease-back structures in weeks rather than months.
It's an aggressive land grab. Apollo and Blackstone are positioning themselves as the utility financiers of the next industrial era. They aren't trying to pick which AI model wins the consumer war. They're content owning the digital shovels in a massive gold rush.
What to Watch Next
If you're tracking the intersection of high finance and technology, the ripples from Project Big Sky give you a clear roadmap for the rest of the year.
First, watch the Anthropic IPO track. The company quietly filed for its US public offering on June 1, fresh off a $65 billion Series H funding round. This debt facility gives them the runway to build out massive infrastructure without diluting their equity right before hitting the public markets.
Second, expect a flood of copycat deals. Every tier-one tech firm and hardware designer is looking at Broadcom's blueprint right now. If you can use private credit to fund gigawatts of data center capacity off-balance sheet, why wouldn't you?
To assess how sustainable this trend is for your own portfolio or market view, keep tabs on the secondary asset-backed credit markets. Watch how the A2 tranche notes trade over the next six months. If the yields compress, it means the wider market has accepted chip leasing as a stable asset class. If they widen, it's a sign that anxiety over hardware depreciation is winning the argument.
