The Chip Giant Helping Anthropic Buy More Chips

The episode opens with Anthropic’s newly announced IPO paperwork and the disclosure of a roughly $63 billion debt deal intended to finance the company’s continuing purchases of artificial-intelligence chips. Bank of America, Citigroup, and Morgan Stanley are leading the transaction, described as the largest AI-infrastructure financing deal so far. WSJ reporter Ben Dummett explains that Anthropic could not independently raise enough money to buy the chips required for its rapid expansion. Broadcom CEO Hock Tan played an unusually active role. According to the Journal’s reporting, Tan spent months lobbying banks and used Broadcom’s credit rating to encourage them to provide about $40 billion of the financing. Broadcom is both a major chip supplier and, in this transaction, a deal negotiator and financial guarantor that could protect lenders against losses if Anthropic defaults. Dummett calls this an extreme example of “circular financing,” in which chip suppliers help finance the AI companies buying their products. The transaction also brings together large banks and private-credit firms such as Blackstone. Banks are generally more conservative, while private credit is often willing to accept more risk; some of the Anthropic debt will not be guaranteed by Broadcom and will be carried by Blackstone. Dummett says the arrangement reflects the size of the AI build-out and the fact that no single lender group wants to fund it alone.

Host Luke Vargas asks whether the Anthropic deal will calm concerns about an AI bubble or make them worse. Dummett says the answer may depend heavily on Anthropic’s IPO. If the public listing falls short, banks, private-credit firms, and investors could become more skeptical of the entire AI trade. If it succeeds, Anthropic could raise substantial cash, strengthen its finances, and encourage investors to keep funding the sector. The underlying concern is that demand for AI services may not justify the enormous investment already being made in chips and data centers. Dummett says circular financing is not inherently good or bad, but becomes dangerous if suppliers finance customers mainly to prop up their own businesses. If Anthropic and similar companies do not deliver the growth that the market expects, both sides of the arrangement could be weakened: the AI buyers may struggle with their debt, while the suppliers could lose customers and face financial exposure. The episode directs listeners to the previous PM edition for further reporting on Anthropic’s revenue, operational risks, and expected IPO timing. The central test is whether the company’s eventual public-market performance validates the financing structure or reveals that the AI build-out has been funded ahead of genuine demand.

With the midterms a week away, the AI industry is watching more than control of Congress. Reporter Amrith Ramkumar says dozens of data-center projects worth hundreds of billions of dollars have been delayed or disrupted by local opposition this year. Around 40 local ballot measures, three dozen governors’ races, and numerous mayoral and county contests could produce new restrictions on facilities that consume large amounts of electricity and water and may raise local prices. Texas is a major focus because it has the nation’s second-largest data-center presence and is viewed as a business-friendly conservative state. Democratic gubernatorial candidate Gina Hinojosa has proposed a moratorium on new data centers until stricter rules are established, potentially going beyond Republican Governor Greg Abbott’s temporary pause while applications are reviewed. In the Senate contest, Democrat James Talarico has attacked Republican Ken Paxton over the issue, part of a broader Democratic effort to portray Republicans as too close to Big Tech and data-center developers. Ohio is also important: gubernatorial candidates Vivek Ramaswamy and Amy Acton have both supported making blanket approvals harder, while local ballot initiatives would impose additional restrictions. In Michigan, Democrat Jocelyn Benson has called for tighter rules, and Senate candidate Abdul El-Sayed has backed a proposal from Bernie Sanders and Alexandria Ocasio-Cortez to ban new data centers. Ramkumar says those results could signal where Democrats are heading on AI policy before the 2028 election cycle.

Vargas notes that the midterm debate is part of a wider public demand for government action on artificial intelligence. A recent Wall Street Journal poll found that 57% of Americans want the federal government to regulate AI immediately. The episode asks whether campaign pledges made by Democrats about data centers and AI will translate into actual restrictions after the election. Jonathan Kanter, who served as an assistant attorney general in the Biden Justice Department’s antitrust division, says congressional gridlock has made comprehensive federal regulation difficult. He argues that companies can still be pushed toward safer products by changing the incentives created by shareholder obligations. In his view, companies should face meaningful consequences if they fail to produce safe and secure systems, giving shareholders a reason to hold management accountable. Kanter says regulation should make the “lines on the road,” stop signs, and traffic lights clear while imposing consequences significant enough to make companies follow them. He rejects the idea that safety rules necessarily require stopping innovation: companies could remain highly profitable and deliver strong shareholder returns while competing to make safer products. Responding to arguments that regulation would merely slow AI, he compares the issue to aviation: if Boeing has a door fly off in midair, Boeing does not need Airbus to ground its planes before fixing the problem. His conclusion is that companies should compete on safety rather than treating continued deployment as mandatory.

A federal appeals court has rejected a Trump administration request that California set aside mail-in ballots from about 20,000 people whom the federal government said might not be U.S. citizens. The two-to-one ruling came amid a months-long dispute over the accuracy of California’s voter rolls. The panel said the emergency claimed by the administration was, at least in part, “self-constructed,” because the government could have filed its lawsuit earlier. California maintains that noncitizens are prohibited from voting and that voters must repeatedly attest to their U.S. citizenship in order to cast ballots. The report places the case within broader allegations by former President Donald Trump and senior administration officials that hundreds of thousands of ineligible people are registered to vote nationwide. The immediate ruling, however, leaves the 20,000 California mail ballots outside the requested set-aside process.

Oil prices were moving higher as attacks on commercial shipping continued in the Persian Gulf, while AAA put average U.S. gasoline prices at about $4.27 per gallon, roughly unchanged from the previous week. Diplomatic efforts to restore free navigation through the Strait of Hormuz had not yet removed the market pressure. Natural-gas prices in Europe were also at their highest levels since 2022, raising concerns about the coming winter. Reporter Julia-Ambrosia Petroni says European gas storage was 74.6% full, well below the historical average for that point in the year. Germany was particularly exposed, with storage at 61%, while Italy was at 90%. The European Union’s target is at least 80% full by November 1. The difference partly reflects the choices of national governments: some relied on private traders to keep buying gas, while others intervened earlier to support state-backed and private purchasers, especially of liquefied natural gas. Private traders held back because summer gas prices were already high and they feared losing millions if winter prices fell. Europe is increasingly dependent on U.S. LNG, while Qatar’s production facilities remain damaged after Iranian attacks. Petroni says weather and the Middle East conflict will determine prices, with competition from Asian buyers potentially keeping European prices high. Qatar’s eventual return could lower prices, but prolonged disruptions could produce further oil, gas, and electricity spikes. EU governments have already spent about $17.9 billion this year cushioning households and businesses.

The Federal Trade Commission and 20 states are suing Dollar General over what they describe as long-standing and “staggering” deceptive pricing. The complaint alleges that the discount retailer knowingly advertised one price but charged customers a higher amount at checkout. The complaint says Dollar General received nearly 30,000 customer complaints in recent years but failed to correct the alleged problem. The lawsuit is supported by both Republican- and Democratic-led states, making it a bipartisan challenge to the retailer’s pricing practices. Dollar General says it intends to vigorously defend itself.

The NFL announced that Jay-Z will headline the next Super Bowl halftime show during Monday night’s game between the Dallas Cowboys and Philadelphia Eagles. The selection represents a reversal for the rapper, who had previously bragged in 2018 about turning down the opportunity. Jay-Z’s company, Roc Nation, has helped the NFL develop its live-music strategy since 2019. Although he has not released new music recently, the episode notes that he has remained visible through an HBO docuseries and live performances. The announcement therefore combines a major entertainment booking with an about-face from Jay-Z’s earlier public stance.