Broadcom CEO compares AI investors to gamblers: They are in a casino

AI investors are treating the market like a casino, according to the CEO of semiconductor giant Broadcom.The exec, Hock Tan, argued Monday that people investing in the tech barely understand where they are putting their money.“A lot of investors have no clue what they are investing in,” he said at an event in Singapore, according to Bloomberg.They “set very extreme expectations only to find out that it’s almost like they are in a casino.The remarks from the chief of Broadcom — which makes it money supplying the AI boom — may come as a surprise.

The $1.7 trillion company’s stock is up nearly 10% this year.Still, Tan went as far as to suggest some investors are being childish.“When you are a kid, you go to a video arcade, you play.Your parents give you $10 of tokens, you finish it in 10 minutes and you haven’t learned anything,” he was quoted as saying.

“That’s what happening in enterprises today.”The comments came as Anthropic is expected to go public around Thanksgiving, with a jaw-dropping valuation in the $2 trillion range.OpenAI is expected to follow afterwards.The companies are relying on a massive global build-out of data centers, chip production, semiconductor wafers and cloud services for their products to meet demand and become profitable.

In spite of the hype around the forthcoming mega-IPOs, Tan described AI as an uncertain investment.“For now, it’s still losing money,” he said of AI.“So frankly, it doesn’t tell anything at this point except that there is a lot of potential revenue growth out of providing frontier generative AI models.”Lack of capital will be the industry’s next hindrance to growth, according to him.Intel CEO Lip-Bu Tan, who shared the stage with the Broadcom boss, echoed the skepticism — saying hardware will remain limited the next few years and memory chips could be the first part of the AI ecosystem to slow down.Recent weeks have seen tech companies — including smart-ring maker Oura, Nvidi...