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AI spending refuses to slow: what SK Hynix and Broadcom reveal about the boom
Key takeaways
Memory remains in short supply: SK Hynix's record earnings show how AI demand continues to favour suppliers.
The money keeps flowing: Broadcom's USD 63 billion financing deal shows infrastructure expansion is far from over.
Spending is not the same as profits: investors increasingly need to distinguish beneficiaries from those financing the boom.
A volatile stock market can make artificial intelligence look like a boom losing momentum. The companies buying its infrastructure seem to disagree.
On 28 October 2026, SK Hynix reported record earnings. Two days earlier, a USD 63 billion financing package was announced to buy Broadcom chips for Anthropic. Together, they show that spending can grow even when share prices wobble. For investors, the question is who earns the profit and who carries the bill.
Memory is having its moment
South Korea's SK Hynix makes memory chips for phones, servers and AI data centres. High-bandwidth memory (HBM) feeds data quickly to powerful AI processors, including those made by Nvidia. Even the fastest processor stalls when information arrives slowly.
Third-quarter revenue climbed 328% to 104.6 trillion Korean won. Operating profit reached 83.3 trillion won, an extraordinary 80% operating margin. Agreements with 14 customers already cover more than half of planned production for 2027 and 2028.
Scarcity gives suppliers pricing power. For SK Hynix, it lifts earnings. For customers, the same shortage raises costs. And with AI infrastructure still expanding, memory is becoming just as strategically important as the processors themselves.
The money behind the machines
US chipmaker Broadcom designs specialised AI processors and networking equipment. On 26 October, Bank of America, Citi, Morgan Stanley and Blackstone announced USD 63 billion in financing to purchase Broadcom equipment for Anthropic, developer of the Claude AI assistant.
The structure matters. A separate financing vehicle will buy the hardware and lease it to Anthropic, with deliveries expected from 2027. Broadcom also provides protection to senior lenders against falling equipment values.
This is not Anthropic paying USD 63 billion upfront. It shows how financing is becoming as important as technology in sustaining the AI expansion.
The arrangement supports Broadcom's sales but also introduces financial risks. Anthropic's proposed initial public offering (IPO), filed on 26 October, will bring additional scrutiny to whether growing AI revenues can eventually justify these enormous commitments.
Risks: the bills can outlast the boom
Memory shortages will not last forever. New capacity or weaker demand could lower prices and margins. AI developers must also generate enough revenue to cover growing computing costs. And if specialised chips lose value faster than expected, supplier guarantees could prove costly.
Investor playbook
- Follow pricing power: watch memory prices and long-term orders, not just impressive quarterly profit figures.
- Look beyond spending: compare AI developers' revenue growth with computing commitments and cash generation.
- Mind concentration: check whether portfolio holdings depend on the same AI infrastructure spending cycle.
The boom is not the return
The AI buildout does not have to stop for investors to become more selective. SK Hynix shows how shortages can translate into exceptional profits, while Broadcom shows how enormous new orders can be made possible through financing. Those are very different sources of value.
Over time, more production may ease memory shortages and lower costs for AI developers. That would help buyers but could reduce the pricing power of today's suppliers. Meanwhile, cheaper computing only creates lasting value if customers are willing to pay for the services it supports.
The question is no longer simply whether AI spending will continue. It is who will earn attractive returns once the bills come due.