Broadcom discloses backstop of up to about $43 billion tied to a customer's AI-rack leases

Broadcom said that on 26 October it arranged for financial partners to take on part of its AI-rack purchase agreements, for racks built on its custom AI accelerators, and the related leases with "the Company’s customer", which the filing does not name. Broadcom is giving residual value support to a new special purpose vehicle. Its "maximum potential liability under the Backstop upon the deployment of the AI racks, on an undiscounted basis, is approximately $43 billion". It described the Backstop as "a contingent liability the Company believes has a low probability of occurring".