🦔The cost of insuring Broadcom's debt just spiked faster than any other AI company. Broadcom is negotiating up to $100 billion in off-balance-sheet debt through special purpose vehicles to finance AI chips for Anthropic, on top of $35 billion it already backstopped in June. The debt doesn't show up on Broadcom's balance sheet but Broadcom guarantees a portion of it. JPMorgan warned that off-balance-sheet AI commitments across the industry are heading into the trillions and called it "phantom leverage." My Take Nvidia guarantees data center leases. Broadcom guarantees chip financing. Both use SPVs to keep the debt off their books so it doesn't show up in the numbers investors normally look at. The bond market is pricing in what the balance sheet doesn't show, which is why Broadcom's credit default swaps spiked 28 basis points in August while the company's earnings still look fine on paper. The phantom leverage is piling up fast. Leases, purchase commitments, residual value guarantees, chip financing backstops, all off the books, all contingent on AI demand staying hot. The SEC decided this month that data center securitization falls outside Dodd-Frank risk retention rules, so the safeguards built after 2008 don't apply here. Apollo and Blackstone show up in every one of these deals, arranging the debt, earning the fees, and passing the risk to the bondholders. If Anthropic or any major lessee stumbles, these guarantees come back onto the chipmakers' books, and the CDS market is already moving on that possibility. Hedgie🤗