JPMorgan warns of ghost leverage in Broadcom AI chip debt, trillions at stake
JPMorgan warned on Aug 24 that AI industry's accumulated ghost leverage via leases, purchase commitments, and residual guarantees could reach trillions of dollars.
On August 24, JPMorgan issued a report warning that as lease contracts, purchase commitments, residual value guarantees, and other credit support continue to accumulate across the AI value chain, the underlying accumulated "ghost leverage" could ultimately reach trillions of dollars.
Broadcom, recently planning to raise over $60 billion for AI chip financing, has become a focal point of market attention. One of its 2031-maturity bonds saw yields rise about 14 basis points in August, with 5-year CDS up 28 basis points over the same period. Bank of America previously estimated that if Broadcom's AI XPV financing platform expands as planned, senior debt could reach approximately $370 billion by 2029.
The report notes that AI infrastructure financing is extending beyond equity and traditional corporate debt into more complex credit structures including leases, guarantees, and SPVs. Once underlying asset valuations are sharply revised, the related credit chains will face systemic pressure.