Tan warns investors are gambling

Broadcom CEO Hock Tan told the DBS Asia Future Forward Conference in Singapore on Monday that many AI investors have no clue what they are investing in.

“A lot of investors have no clue what they are investing in. They set very extreme expectations only to find out that it's almost like they are in a casino.”

Companies waste money on tokens

Tan said most enterprises are wasting money spending tokens trying to understand AI, comparing it to a child at an arcade spending ten dollars in ten minutes and learning nothing.

“People are just wasting money, spending tokens, trying to understand (AI). That's what's happening in enterprises today.”

OpenAI revenue masks losses

Tan noted OpenAI's annualised revenue of fifty billion dollars in September was not that bad for a startup, but the company still loses money because it spends heavily on training.

Capital emerges as key constraint

Both Hock Tan and Intel CEO Lip-Bu Tan said capital could become a bigger constraint on AI than chips, memory or power, with demand for computing infrastructure outstripping supply through twenty twenty-nine or twenty thirty.

“What I think might be the biggest constraint is capital.”

Chip stocks fall on Tan's remarks

After Tan's comments, chip stocks fell in Asia on Tuesday. South Korea's Kospi index dropped more than seven percent. Samsung Electronics fell nine percent and S K Hynix fell ten percent by midday.