Broadcom Inc (NASDAQ:AVGO) shares slid on Thursday after a report said its AI chip partnership with OpenAI ran into an $18 billion financing challenge tied to the first phase of chip production. The stock is rebounding in premarket trading on Friday.

Microsoft Holds The Key To The Deal

According to The Information, Broadcom wants Microsoft Corp. (NASDAQ:MSFT) to commit to buying roughly 40% of the chips before financing the initial 1.3-gigawatt deployment.

Under the proposed structure, Microsoft would install the chips in its data centers and lease the capacity back to OpenAI.

The report said Broadcom views Microsoft’s purchase commitment as critical to securing repayment confidence, while OpenAI considers the project important to lowering long-term server costs and improving profit margins as it expects operations to consume more than $200 billion through 2029.

Meanwhile, analysts continue to view the deal as a major long-term ...