Financial discussions regarding Open AI customized chips… Expanding cooperation between semiconductor suppliers and financial companies Oracle also discussed securing funding for chip purchases... Diversifying procurement methods to expand infrastructure investment
The Wall Street Journal (WSJ) reported on the 7th (local time) that Broadcom is seeking to raise more than $50 billion in funding related to OpenAI customized artificial intelligence (AI) chips. We are in discussions with Apollo and Blackstone, and as discussions are in the early stages, the scale may vary.
As the investment costs required to expand AI infrastructure increase, the role of semiconductor suppliers is also expanding. In addition to supplying chips and network equipment, semiconductor companies also work with financial companies to provide funds necessary for the introduction of customer facilities.
Broadcom also established a platform to support AI infrastructure investment with Apollo and Blackstone last June. The initial transaction size is $35 billion, and is designed to support Antropic's expansion of computing infrastructure of more than 1 gigawatt (GW). This is an example of a semiconductor company providing technology and a financial company providing capital supporting a client's investment plan together.
The background to this demand for funds is the expansion of demand for AI semiconductors. AI semiconductor sales for the third quarter of fiscal 2026 announced by Broadcom in September were $16.7 billion, up 221% from the same period last year. The company predicted that sales in the fourth quarter would reach $21.7 billion based on demand for customized AI accelerators and network equipment.
The WSJ reported that Oracle, which is introducing the equipment, is also in discussions with Apollo and Goldman Sachs to raise funds to purchase chips. A method is discussed in which investors put money into a separate company, and this company purchases chips and leases them to Oracle. The deal is not yet confirmed.
Oracle's public performance shows the amount of cash being invested in infrastructure expansion. The operating cash flow for the first quarter of fiscal 2027, which the company announced in September, was about $23.1 billion, but facility investment amounted to about $28.5 billion. Free cash flow, which deducts facility investment from operating cash flow, was a deficit of approximately $5.4 billion. Oracle explained that it is continuing to invest to support the growth of its cloud infrastructure.
Means of securing investment funds include issuing shares. Oracle raised $20 billion before fees by issuing common stock as part of its previously disclosed capital investment plan in the quarter.
A contract method in which the customer pays the cost of securing the equipment first is also being used. In its earnings announcement last March, Oracle explained that most of the equipment needed for large-scale AI contracts at the time was purchased with customer upfront payments, or customers directly purchased GPUs and provided them to the company. In its September earnings call, it said it had secured more than $30 billion in new AI cloud contracts and that the structure of these contracts had no additional impact on its existing financing plans.
Expanding AI investment increases sales of semiconductor suppliers while also requiring upfront spending by infrastructure builders. To determine whether the announced investment plan will lead to actual equipment orders and service sales, it is necessary to look at the size of the investment, whether or not financing has been completed, the procurement conditions, and the cash flow of the invested company.
