Leading AI lab Anthropic is advancing a $60 billion financing plan for “Project Polaris” to procure around 1.5 gigawatts of Google’s custom-built tensor processing units (TPUs). The financing structure includes approximately $42 billion in senior debt, with Broadcom providing a residual value guarantee, and another $18 billion in subordinated debt. Private equity giant Blackstone has committed to subscribe to $9 billion, about half of the subordinated debt. According to people familiar with the matter, the subordinated debt Blackstone is buying carries a coupon as high as 10%. Taking into account the issue discount and fees, investors’ actual yield will be even higher.
This financing cost is significantly higher than before. In June, Anthropic secured $35 billion in chip financing through its “Big Sky” project, including $4.4 billion in subordinated debt at an interest rate of about 8.5%. By comparison, the ICE BofA BB US High Yield Index shows that borrowers with similar credit ratings have yields to maturity of about 7% in public markets. The financing of another AI cloud provider, Volta, offers an even clearer example: JPMorgan and Goldman Sachs completed a $5 billion leveraged loan issuance on October 15, priced at 6.5 percentage points above the benchmark rate and at 95 cents per $1 of face value. Based on benchmark rates at the time, the yield exceeded 11%.
Markets are concerned that AI debt risks are building. A Goldman Sachs report shows that the average price of high-yield data center bonds has fallen from $101 in June to nearly $95, while credit spreads on AI-related high-yield bonds have widened to more than 350 basis points, and spreads on data-center-specific debt have exceeded 400 basis points. Goldman strategists noted that the U.S. has issued $106 billion in investment-grade and high-yield corporate bonds this year to fund AI projects—nearly three times the total for all of 2025. They expect global data center bond issuance could exceed $300 billion next year. Despite rising financing costs, Goldman Sachs believes this is unlikely to bring investment to a complete halt.