Tier 2 Broadcom

Bear Case

[MISLEADING] The CEO of Broadcom has publicly stated a skeptical view on the immediate productivity gains from AI agents, creating a conflict with the company’s role as a financial guarantor for the hardware intended to produce those gains.

Broadcom CEO told investors 2 weeks ago he doesn’t see productivity gains from AI agents. Now Broadcom guarantees 30 billion of this debt. The company whose CEO said productivity hasn’t shown up is now guaranteeing hardware that’s supposed to produce it.
- Correction: Broadcom’s CEO did not express a skeptical view on the productivity gains from AI agents. His comments were in response to a specific question about the impact of AI on his company’s software sales, which he stated was positive.
[VERIFIED] The economic viability of AI hardware is challenged by the rapid deflation in per-token pricing for AI models, which has decreased from a range of $10-$15 to as low as sub-$0.20 per million tokens.

Per token prices fell from 10 to 250 per million tokens in the succeeding year. Well, we just did the video 2 days ago, and we showed that Deep Seek is at 19.66 cents, all right? And and Anthropic, $15 per million, okay?

[VERIFIED] A $35 billion Special Purpose Vehicle (SPV) has been formed by Anthropic, Broadcom, Apollo, and Blackstone to finance AI chips, structured as a lease to Anthropic with Broadcom guaranteeing the debt against a resale value shortfall.

Anthropic, Broadcom, Apollo, Blackstone, and Google got together, and they formed an SPV. It’s a $35 billion private credit. … to a special purpose vehicle, SPV, that leases the chips to Anthropic, with Broadcom guaranteeing the senior debt against a resale shortfall.