Broadcom has backed a customer's five-year compute lease obligations, with maximum potential liability of about $29 billion after full deployment, according to its quarterly filing for the period ended August 2. No payments had been made, and the recorded fair value was immaterial. In a default, the liability would reflect 85% of outstanding covered amounts less equipment proceeds. Exposure rises as racks are deployed and falls as lease payments arrive. The filing also describes conditional financing through customer convertible notes of up to $42 billion, none of which had been issued. Broadcom generated $13.665 billion of free cash flow in the quarter, and held $23.975 billion in cash. The maximum backstop equals about 2.12 quarters of that free cash flow. AI semiconductor revenue reached $16.7 billion.

Broadcom chief executive officer Hock Tan says access to capital, not chips, memory or electricity, could become the biggest constraint on AI expansion. Speaking at the DBS Asia Future Forward Conference in Singapore on Monday, he said supply bottlenecks have repeatedly emerged and eased over the past two years. Demand still outstrips supply, Tan said, and the gap could last through 2029 and possibly into 2030. He warned that many investors "have no clue what they are investing in." He noted that OpenAI's annualised revenue nears $50 billion, but said that does not prove lasting profit given high training costs. Intel chief executive officer Lip-Bu Tan also pointed to the cost of capital and the need to show returns. Global chip stocks fell, and Broadcom shares traded lower in premarket trading on Thursday.

Broadcom's AI semiconductor revenue rose 221% to $16.7 billion in fiscal Q3, and management guided Q4 to $21.7 billion, up 236%. It expects to exceed $30 in earnings per share in fiscal 2028. Slower segments are seen as a drag, but software carries a 94% gross margin. Non-AI chip revenue grew 5% to $4.2 billion. Free cash flow reached $13.665 billion, and the company raised its dividend for the 15th straight year to $0.65 a quarter. Shares fell 8.04% in a week to $346.25, leaving them up 0.59% this year. Risks include six custom chip customers, $59.6 billion of fixed-rate debt, and gross margin heading to 73% from 78%. The next earnings report is due December 9, 2026.