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either party during the applicable lease period except in the case of a default. In connection with the 2026 Lease 
Arrangement, we deposited cash into a restricted cash account for the benefit of Broadcom and may be required 
to  deposit  additional  cash  under  certain  circumstances  for  the  benefit  of  Broadcom.  Our  two  special  purpose 
subsidiaries entered into agreements for the Lease Arrangements, the obligations of which are guaranteed by 
Anthropic,  PBC,  and  such  obligations  are  secured  by  the  leased  equipment.  Further,  we  agreed  to  customary 
events of default, including cross-defaults, upon which our obligations may be accelerated. We may, if needed, 
finance  a  certain  amount  of  our  quarterly  rent  payments  under  the  2026  Lease  Arrangement  through  the 
issuance of convertible promissory notes under the Infrastructure Partner 2026 NPA in certain circumstances. 
See the section titled “—Convertible Notes—Broadcom” for more information. In the second quarter of 2026, 
Broadcom assigned a portion of its rights under one of the master equipment leases to another third party.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss 
that may impact our financial position due to adverse changes in financial market prices and rates. Our market 
risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.

Interest Rate Risk

As  of June  30,  2026,  we  had $112.4  billion  of  cash  and  cash  equivalents  and $19.3  billion  of  short-term 
investments  in  a  variety  of  securities,  including  money  market  funds,  U.S.  Treasury  and  agency  securities, 
corporate  debt  securities,  and  commercial  paper.  In  addition,  we  had $2.5 billion of restricted cash primarily 
due  to  amounts  held  as  collateral  for  our  lease  and  other  obligations.  Our  cash,  cash  equivalents,  and  short-
term  investments  are  held  for  working  capital  purposes,  and  we  do  not  enter  into  investments  for  trading  or 
speculative  purposes.  Due  to  the  relatively  short-term  nature  of  our  investment  portfolio,  a  hypothetical  100 
basis point increase or decrease in interest rates would not have had a material effect on the fair value of our 
investment portfolio as of June 30, 2026. 

Foreign Currency Exchange Risk

We transact business globally in multiple currencies, with the vast majority of our revenue denominated in U.S. 
dollars and, to a lesser extent, other currencies such as euros and British pounds. Our international revenue, as 
well as costs and expenses denominated in foreign currencies, and intercompany transactions with our foreign 
subsidiaries, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar. A 
hypothetical  10%  change  in  foreign  currency  exchange  rates  applicable  to  our  business  would  not  have  a 
material  impact  on  our  consolidated  financial  statements  as  of June  30,  2026.  We  have  not  entered  into 
derivative  or  hedging  transactions,  but  we  may  enter  into  such  arrangements  in  the  future  if  our  exposure  to 
foreign currency becomes more significant.

Critical Accounting Estimates

Our  discussion  and  analysis  of  our  financial  condition  and  results  of  operations  are  based  upon  our  financial 
statements, which have been prepared in accordance with GAAP. GAAP requires us to make certain estimates 
and judgments that affect the amounts reported in our financial statements. We base our estimates on historical 
experience,  anticipated  future  trends,  and  other  assumptions  we  believe  to  be  reasonable  under  the 
circumstances.  Because  these  accounting  policies  require  significant  judgment,  our  actual  results  may  differ 
materially from our estimates.

We  believe  that  of  our  significant  accounting  policies,  which  are  described  in  Note  1  to  our  consolidated 
financial statements included elsewhere in this prospectus, the following accounting policies involve a greater 
degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in 
fully understanding and evaluating our consolidated financial condition, results of operations, and cash flows.

Stock-Based Compensation

We  measure  compensation  expense  for  all  stock-based  payment  awards,  including  stock  options  and  RSUs, 
granted to employees, directors, and other service providers, based on the estimated fair value of the awards on 
the date of grant. The most significant input in determining the fair value of a stock option is the estimated fair 

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