Broadcom (NASDAQ:AVGO) shares declined nearly 2% in premarket trading on Thursday following a report that the company is in talks to raise approximately $50 billion in financing for a custom artificial intelligence chip program developed jointly with OpenAI. The stock's pullback comes after a four-session winning streak that saw shares climb 3.35%, 2.08%, and 3.67% in the three sessions before Wednesday, when the stock edged 0.19% higher against a broader market sell-off.
Credit Market Moves
According to The Wall Street Journal, Broadcom has engaged with major private credit firms, including Apollo and Blackstone, to secure funding for the OpenAI chip initiative. The discussions are still at an early stage, and the final size of the financing could change, the report said. The deal is expected to be finalized before the end of this year.
This reported package would be similar to Broadcom's earlier $60 billion debt facility arranged for Anthropic PBC, and the company had also pursued $35 billion in financing to help Anthropic expand its computing capacity. The latest financing discussions come as Broadcom and OpenAI move ahead with plans to develop large-scale custom AI infrastructure.
OpenAI Chip Project
Broadcom and OpenAI have combined to deploy 10 gigawatts of custom AI accelerators, with the systems being developed and deployed by OpenAI in partnership with Broadcom. Broadcom also supplies Ethernet switches used to connect the chips and runs VMware infrastructure software. The companies have said they plan to begin deploying the systems in the second half of 2026 and continue through the end of 2029.
The scale of the project underscores the significant capital required to build out AI computing infrastructure, and the reported financing could provide additional funding capacity for the program.
Investor Sentiment
Despite Broadcom's consistent earnings beats—having exceeded EPS estimates in all eight of its latest reported periods—shares have moved an average of -1.25% the day after, according to Yahoo Finance. The stock remains around 25% below its peak of $495 achieved in June this year.
Broadcom's revenue increased 49% over the 12 months through the third quarter of fiscal 2026, while analysts are forecasting 66% revenue growth for fiscal 2026. The company said engagement remains strong for the next two generations of its XPU program following the v8i ramp in 2027.
This article is for informational purposes only and does not constitute financial advice.
