# Broadcom CEO Hock Tan Warns of OpenAI Spending and AI Credit Risks

- URL: https://stocks.freetheai.org/news/broadcom-ceo-hock-tan-warns-of-openai-spending-and-ai-credit-risks-ee08a1
- Published: 2026-10-13T06:00:41Z
- Category: company_news; sentiment: bearish; impact: medium
- Symbols: [NASDAQ:AVGO](https://stocks.freetheai.org/symbols/NASDAQ-AVGO), [NASDAQ:OPENAI](https://stocks.freetheai.org/symbols/NASDAQ-OPENAI)
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Broadcom Inc. (NASDAQ:AVGO) Chief Executive Officer Hock Tan voiced concerns over artificial intelligence spending and customer funding, despite acknowledging that OpenAI (NASDAQ:OPENAI) reached a $50 billion annualized revenue run rate as of September. Speaking at an industry event in Singapore, Tan emphasized that OpenAI continues to lose money because of substantial expenses required for computing infrastructure and model training.

The comments draw attention to financial interdependencies across the technology sector. Broadcom produces custom AI chips for OpenAI and participates in financing arrangements that support customer AI hardware purchases. Tan also warned that current corporate adoption remains inefficient, comparing enterprise token consumption to spending money without gaining meaningful knowledge.

Investors are watching how customer financing challenges could affect broader hardware demand and credit conditions. The cost of insuring Broadcom debt against default recently reached a record high, reflecting increased investor concern over credit risk as Broadcom shares fell 1.88% to 354.7 USD.

## Key points

- Broadcom Inc. CEO Hock Tan stated OpenAI reached a $50 billion annualized revenue rate in September but remains unprofitable due to heavy computing and training costs.
- Tan cautioned that corporate artificial intelligence token usage is currently yielding limited value relative to its high cost.
- Broadcom supplies custom AI chips to OpenAI and is involved in financing arrangements for customer AI infrastructure purchases.
- Credit default swap costs for Broadcom debt reached a record high amid credit risk concerns, while its stock fell 1.88% to 354.7 USD.

## Questions and answers

### What did Broadcom's CEO say about OpenAI's profitability?

Hock Tan stated that despite OpenAI reaching a $50 billion annualized revenue run rate as of September, the company remains unprofitable due to heavy spending on model training and computing infrastructure.

### Why are investors concerned about Broadcom's credit risk?

Investor concern grew after the cost to insure Broadcom debt against default reached a record high, following questions surrounding customer financing and the sustainability of AI hardware demand.