Broadcom Inc. (AVGO) CEO Hock Tan sparked significant market turbulence after comparing many AI investors to casino gamblers during a Singapore appearance.
Tan told the audience that the surge in artificial intelligence investing has drawn in participants who behave more like gamblers than informed, disciplined investors.
“A lot of investors have no clue what they are investing in,” Tan said, adding that they set very extreme expectations, only to find out that it is almost like they are in a casino.
Tan argued that many investors are placing outsized bets on AI, particularly on large language models, without fully understanding the underlying technologies or business models involved.
Beyond investor behavior, Tan also raised pointed questions about whether corporations are pouring money into AI initiatives without clear commercial payoffs.
To illustrate the point, he compared current enterprise experimentation with AI to children burning through arcade tokens with nothing to show for it.
“Your parents give you $10 of tokens, you finish it in 10 minutes and you haven’t learned anything,” Tan said. “That’s what’s happening in enterprises today.”
As the head of a company designing key components for global data centers, Tan also questioned the long-term economic viability of AI labs that continue operating at a loss.
He noted that OpenAI achieved an annualized revenue of $50 billion, which signals potential, but he stopped well short of calling it a guarantee of long-term profitability.
“For now it’s still losing money because they’re spending a lot on training,” Tan said. “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.”
The remarks triggered a broader sell-off among chip stocks, with South Korean semiconductor equities tumbling on Tuesday as investors reassessed the sustainability of AI infrastructure spending.
Some market observers argued that investors had misread Tan’s comments, pointing to his broader record of bullish projections for Broadcom’s AI semiconductor business.
Tan pushed back in September against concerns that a slowdown in frontier AI model development could threaten Broadcom’s outlook, insisting the company’s fiscal 2027 and 2028 projections remained fully intact.
At that time, he projected AI semiconductor revenue would reach $115 billion in fiscal 2027, then double to $230 billion in fiscal 2028, painting an aggressive growth picture.
The contrast between those projections and his Singapore remarks underscores the complexity of navigating investor sentiment during a period of extraordinary, and at times speculative, AI capital deployment.
