Broadcom in Early Financing Talks for OpenAI Chips

Let's talk about the financing and start with that tech story because as we mentioned, Broadcom already looking at another massive AI financing deal. This one tied to OpenAI. The company has held early talks about ranging $30,000,000,000 in debt to help OpenAI pay for the custom AI chips that the two companies are developing together. Let's discuss with Bloomberg tech editor Sarah Frier. And and, Sarah, it's another day with this type of deal. NVIDIA does this a lot too, the sort of chip financing, circular financing concern type deals. What are the details behind Broadcom yet again arranging one of these deals? Money to fund the purchase of chips that it's codeveloping with OpenAI. I mean, the... We're seeing this over and over. Either working also with Anthropic, they're working also with Google. This is, I'll say it again, an extremely expensive business to build, and you need new chip. Your chips only have a certain life cycle. You need to keep developing new ones. You need to buy chips to to house in the data centers. You need to furnish the data centers in in, different communities, make sure that they are... That you have the energy resources. It is a lot. And and this is this is, OpenAI fresh off of deciding or declaring that they're going to IPO next year. I know that happened a couple months ago. It... But in in our in our minds, you know, that's still pretty recent. They have the need for more money, for more financing to fund their growth if they're not going to IPO this year. They're working here with Apollo and Blackstone. I'm just looking at my notes here. 20 gigawatts of AI computing capacity by 2028. This number keeps changing. Like, how much confidence does the market have? I mean, every week, it just keeps growing. It's not even monthly anymore. It's just going so quick. It's growing quickly, and I I think we also need to think about the different factors involved in that growth. Right? It's not just the demand in the market for AI. It's also the cost of these chips. It it... It's the it's the the supply calculation. There just aren't as many of them to go around. They need more and more each training round. They need to get get their product to be better and better. And and this is... You're right. It's going to accelerate, and then you get to a question of of when does this collide with reality? When or when do we just... Or we're just fundraising until there's no there's no more funders willing to do private debt deals and and complicated creative financing deals in the public market can't withstand it? You know, where... When do we get to that point? You know, I don't think that we're at that point yet, but it's certainly something that that we're looking at. We're looking at, you know, when people are skeptical of public market events. For example, if there's an earnings where a company is extremely well, but it's not good enough as we saw recently. You know, I think we're gonna see a lot more of that this quarter. This earning season is going to be very telling. Yeah. It's very expensive, and then consumers don't wanna pay up for this stuff, which doesn't help either. Sarah, thank you so much for joining us. Bloomberg's Sarah Frier.