Broadcom CEO: Many AI investors are like casino gamblers

Chip company Broadcom's CEO Hock Tan stated at an event in Singapore on Monday that the artificial intelligence craze has attracted a group of investors with strategies similar to gamblers, some of whom have little understanding of what they are betting on. He noted that many investors "have no idea what they are investing in," setting extremely high expectations, resulting in a situation that is "almost like being in a casino," and specifically pointed to the investment frenzy stemming from a lack of understanding of cutting-edge large language models.

As the head of a company that designs key components for global data centers, Tan also questioned whether companies are wasting money on AI projects and the long-term economics of AI labs that are continuously losing money. He mentioned that ChatGPT developer OpenAI's annualized revenue reached $50 billion in September, indicating a viable model, but it does not guarantee long-term profitability; it is still losing money due to high training costs, and currently only suggests that cutting-edge generative models have significant potential revenue growth.

Tan also warned that insufficient capital could become the next constraint on industry growth. Nvidia-backed Australian data center company Firmus Grid withdrew its planned $5.5 billion IPO last week. Before Tan's remarks, DBS Group CEO Tan Su Shan stated that after a large amount of investment, the market is repricing the risks associated with AI financing.