Broadcom chief executive Hock Tan compared many AI investors to gamblers who have little idea what they are betting on. He spoke on Monday at the DBS Asia Future Forward Conference in Singapore, Bloomberg reported.
“A lot of investors have no clue what they are investing in,” Tan said. They “set very extreme expectations only to find out that it’s almost like they are in a casino.”
Tan shared the stage with Intel CEO Lip-Bu Tan, in a panel on where the next trillion dollars in AI will come from. DBS chief executive Tan Su Shan moderated. TikTok’s Shou Chew spoke earlier at the same conference.
“Wasting money” on tokens
Hock Tan said most companies have not yet found AI uses that pay off, The Business Times reported.
“People are just wasting money, spending tokens, trying to understand (AI),” he said.
He compared it to a child at an arcade who spends $10 in ten minutes and learns nothing.
“That’s what’s happening in enterprises today,” he said.
He said OpenAI’s annualised revenue of $50bn in September was “by itself, not that bad” for a startup. OpenAI is still losing money because it spends heavily on training, he said. So the figure says little yet about long-term profits.
Capital as the bottleneck
Both CEOs said money could become a bigger constraint on AI than chips, memory or power, CNBC reported.
“What I think might be the biggest constraint is capital,” Hock Tan said.
AI’s future value lies with frontier model builders, rather than with the “picks and shovels” hardware suppliers, Hock Tan said. Those model builders will chase the same sources of financing as today’s infrastructure companies.
“If there’s any challenge in the front, it’s capital and the cost of capital,” Lip-Bu Tan said.
In the longer run, he added, people want to see a return on their investment.
Even so, demand for computing infrastructure still outstrips supply, Hock Tan said. That could last through 2029, possibly into 2030. He expects wafer shortages to ease by 2028 or 2029. Lip-Bu Tan said he saw no significant slowdown in the next two to three years.
Broadcom itself is raising $60bn in debt to help Anthropic and other customers pay for AI chips and infrastructure.
Lip-Bu Tan also said Chinese frontier models such as DeepSeek, Kimi and GLM are “good enough”. Their lower token costs have driven “very fast” adoption, he said, Reuters reported.
Musk and the markets
“No crying in the casino,” Elon Musk wrote on X, replying to a post about Tan’s remarks.
Chip stocks fell in Asia on Tuesday. South Korea’s Kospi index dropped more than 7% during trading. Samsung Electronics fell 9% and SK Hynix 10% by midday, Business Insider reported.
Investors were also weighing progress by Chinese memory maker CXMT. The company said it had made progress on technology that packs more data onto memory chips.