Broadcom CEO warns that AI investors are like gamblers

ChainCatcher report: On Monday at an event in Singapore, Hock Tan, CEO of chipmaker Broadcom, said that the AI boom has attracted a cohort of investors with gambler-like strategies, some of whom have little to no understanding of what they are investing in. He noted that many investors “have no idea what they’re investing in,” set extremely aggressive expectations, and the situation has become “almost like a casino,” specifically pointing to the investment frenzy driven by insufficient understanding of cutting-edge large language models. As the head of a company designing key components for global data centers, Tan also questioned whether businesses are wasting money on AI projects and the long-term economic viability of AI labs that continue to operate at a loss. He mentioned that OpenAI, the developer of ChatGPT, achieved an annualized revenue of $50 billion in September, indicating a viable business model—but not guaranteed long-term profitability. The company is still losing money due to massive training costs; at this stage, it merely suggests that frontier generative models have substantial potential for revenue growth. Tan also warned that insufficient capital could become the next constraint on industry growth. Last week, Firmus Grid, an Australian data center company backed by NVIDIA, withdrew its planned $5.5 billion IPO. Prior to Tan’s remarks, DBS Group CEO Tan Su Shan said that after heavy investment, the market is now repricing the financing risks associated with AI.