Anthropic offers Blackstone double-digit yield in chip-financing deal: What the $60 billion deal entails

Anthropic is seeking $60 billion to finance Google TPU purchases, including $9 billion in Blackstone-managed junior debt offering returns above 10%. The deal reflects rising costs for AI infrastructure. 

Anthropic is offering Blackstone a yield of more than 10% to finance a $60 billion artificial intelligence (AI) chip deal, the Financial Times reported, citing people familiar with the matter. The deal is touted to be the largest chip-financing arrangement to date.

Known as Project North Star, the financing will support Anthropic’s acquisition of approximately 1.5 gigawatts of Google’s custom tensor processing units (TPUs), as AI developers race to secure computing capacity.

Blackstone-managed funds are expected to invest $9 billion in junior debt backed by Anthropic’s five-year chip lease payments. This represents half of the planned $18 billion junior financing.

The investment firm has been offered a 10% coupon, with total returns exceeding that level after accounting for issuance discounts and fees. By comparison, similarly rated borrowers typically pay yields of around 7% in public bond markets. The remaining $9 billion in junior debt is expected to be offered to other investors in the coming months, potentially at lower yields.

How is the deal structured?

The financing package also includes approximately $42 billion in senior debt guaranteed by Broadcom, which collaborates with Google on chip development.

The deal follows Anthropic’s Project Big Sky financing, through which the company raised around $4.4 billion at an 8.5% interest rate four months ago. The higher borrowing cost in the latest arrangement reflects growing investor demands for compensation amid concerns over rising AI infrastructure spending.

Anthropic received a credit rating one notch below investment grade from KBRA in June, and the new junior debt is expected to receive a similar assessment. The company is seeking investment-grade status to lower future borrowing costs.