Blackstone Warns Anthropic May Get Junk Rating After IPO, Sinking Tech Stocks

Blackstone Warns Anthropic May Get Junk Rating After IPO, Sinking Tech Stocks

TREE NEWS reports: Blackstone has told investors that Anthropic, the AI startup backed by Amazon and Google, may not receive an investment-grade credit rating immediately after its initial public offering, and that major rating agencies are likely to assign it a “high junk” rating instead. The warning was conveyed to investors in a $63 billion chip-financing deal for Anthropic. If the rating falls into junk territory, Anthropic’s plans to finance more than $800 billion in computing infrastructure would become more complicated.

The news sent US tech stocks to intraday lows on Friday, with the Nasdaq 100 closing down 3.5%. The selloff had already been sharpened by disappointing earnings from Amazon and Intel, which heightened concerns about the sustainability of the AI boom. One fund manager focused on US tech stocks described the day’s trading as “a bloodbath.”

Investment-Grade Expectations Dashed

For months, Blackstone had been telling investment partners that it expected Anthropic to secure an investment-grade rating by the end of the year. But based on guidance from major rating agencies, Blackstone recently changed its tune, saying Anthropic is more likely to receive a rating in the BB range or above. Under S&P and Fitch rating scales, BBB- and above is investment grade, while BB+ and below is speculative grade, commonly known as “junk.”

The rating is critical for Anthropic. The company filed for an IPO on Monday and could complete the largest listing in history next month. Its prospectus outlines a “bold but rational” plan to invest more than $800 billion in computing infrastructure through 2045. Anthropic currently holds over $112 billion in cash and equivalents, and investors expect the IPO to raise about $100 billion more.

An investment-grade rating would allow Anthropic to borrow at lower interest rates to finance these projects. Many insurance companies and pension funds are restricted by regulations to primarily investment-grade holdings, or face limits on the amount of junk debt they can hold. Once an issuer falls to BB+ or below, its accessible funding pool narrows significantly and borrowing costs rise.

“The key is access to credit—that’s very important… if [Anthropic] is not investment grade, the cost of credit will rise, and that’s not good for anyone,” said one fund manager focused on US tech stocks.

Bankers for Anthropic and rival OpenAI are lobbying several of the largest rating agencies in hopes that both AI companies receive investment-grade ratings after going public. The three major agencies—Fitch, Moody’s, and S&P—have not yet officially assigned any credit rating to Anthropic.

‘Project North Star’: Leaning on Broadcom’s Credit

The latest $63 billion deal, codenamed “Project North Star,” was completed by Wall Street banks earlier this week. The funds will be used for Anthropic to lease 1.5 GW of chips from Google. Blackstone served as anchor investor and worked with the arranging banks to resell the debt to other investors.

The deal structure reveals Anthropic’s reliance on supplier credit. More than $42 billion of senior loans are guaranteed by Broadcom, which is co-developing the chips and holds a high single-A investment-grade rating—a key factor in Anthropic securing the financing. Institutional investors favor senior debt because it ranks ahead of subordinated loans in the event of default.

Another $18 billion of subordinated debt is backed by Anthropic’s lease payments, meaning lenders bear more direct exposure to Anthropic’s credit risk. Blackstone funds subscribed to $9 billion of that at a yield above 10%. The subordinated debt received a BB+ rating with a positive outlook from Kroll Bond Rating Agency, slightly improved from the stable outlook on a similar deal four months ago called “Big Sky.” Morningstar DBRS assigned a BB rating.

Anthropic, Blackstone, KBRA, Morningstar DBRS, and S&P declined to comment. Fitch and Moody’s did not respond to requests for comment.

Market Implications

The prospect of a junk rating for one of the most prominent AI companies highlights a growing tension in the market: the AI infrastructure buildout requires enormous amounts of debt, but the companies leading the charge may not have the credit profiles to support investment-grade borrowing. This could force them to rely on more expensive, structured financing arrangements—such as the Broadcom-backed deal—which shifts risk to lenders and ultimately to the broader financial system.

For equities, the news adds to a growing list of concerns for AI-related stocks. The Nasdaq 100’s 3.5% drop on Friday underscores how sensitive the market has become to any sign that the AI trade may be cooling. If Anthropic’s IPO is priced at a junk rating, it could dampen enthusiasm for other AI listings and raise questions about the valuations of private AI companies.

For bonds, the deal structure—with a large senior tranche backed by Broadcom and a subordinated tranche yielding over 10%—illustrates how credit risk is being sliced and distributed. A junk rating for Anthropic would likely widen spreads on AI-related debt and could make investors more cautious about similar deals.

For crypto, the impact is indirect but notable. AI and crypto have become increasingly intertwined, particularly in decentralized compute and GPU networks. A slowdown in AI infrastructure spending could weigh on sentiment for AI-adjacent crypto projects, though the immediate effect is likely to be muted.

For commodities, the AI buildout has been a major driver of demand for electricity, copper, and other materials. If financing becomes more expensive, some projects could be delayed, potentially softening demand expectations.

For currencies, the dollar could benefit if global investors seek safety amid a tech-led selloff, though the primary driver remains Federal Reserve policy.

Key Takeaways for Investors

• Credit risk is the new AI risk. The market is shifting from rewarding AI growth stories to scrutinizing how they are financed. A junk rating for Anthropic would be a milestone in that transition.
• Watch the IPO pricing. If Anthropic lists with a junk rating, it could set a precedent for other AI companies and weigh on the broader IPO market.
• Structured deals are a double-edged sword. The Broadcom-backed financing shows how suppliers can help AI companies access credit, but it also concentrates risk in the hands of a few large lenders.
• Tech volatility is likely to persist. With earnings from Amazon and Intel already disappointing, the market is primed to react negatively to any further signs of AI fatigue.