Broadcom chief warns investors they are gambling on AI hype

At a Singapore conference, Broadcom chief Hock Tan criticized one outlet wave of AI investment, arguing that many backers do not grasp the economics of large-language models and are essentially gambling. He compared enterprise AI token usage to a kid rapidly spending arcade tokens with no lasting benefit. While acknowledging OpenAI’s annualized revenue reaching $50 billion, Tan stressed that ongoing training expenses keep such firms unprofitable.

He warned that a lack of capital could become the next bottleneck for the sector. Tan also referenced the recent withdrawal of Firmus Grid Ltd.’s $5.5 billion IPO as evidence of mounting skepticism toward AI infrastructure valuations. Intel’s Lip-Bu Tan and DBS Group’s Tan Su Shan echoed concerns about hardware supply and financing risks.