Shares of Broadcom rose Thursday following a report that the chip designer agreed to lend Anthropic up to $42 billion and that the artificial-intelligence company would become Broadcom's largest customer next year.
Broadcom stock gained 0.3% to $352.10 after ending Wednesday down 1.1%. Tech stocks opened higher even as shares of Micron Technology were down 1.9% following the company's stellar quarterly earnings. Investors were betting the Federal Reserve would hold interest rates steady.
Shares of Broadcom, however, were rising, as the company's relationship with Anthropic seems to be solidifying ahead of the AI company's highly anticipated initial public offering.
Broadcom has agreed to give Anthropic up to $42 billion to finance infrastructure spending with the relationship between the two companies spanning computing supply, equipment leasing, and financing. The deal was reported by Reuters, which cited Anthropic's initial pulblic offering prospectus.
As part of the financing agreement, Anthropic would become a major customer for Broadcom's custom chip design business starting next year. Broadcom could also designate a financing partner, and debt could be converted into Anthropic stock, according to Reuters.
Reports have recently emerged about Anthropic's IPO and its relationships with other companies after its confidential S-1 IPO prospectus leaked.
Neither Anthropic nor Broadcom responded to Barron's requests for comment.
Broadcom already had chip supply deals with both Anthropic and OpenAI, but this financing partnership would further solidify the relationship between Anthropic and Broadcom. The company also plays a crucial role in custom chip design for Alphabet and Meta Platforms.
Broadcom stock fell 5.2% in September and has declined 27% as of the closing bell on Wednesday since June 2, when it notched a closing record high of $481.57.
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