Hock Tan, CEO of semiconductor manufacturer Broadcom, believes that a significant number of investors in the artificial intelligence industry behave in the same way as casino players — they rely solely on luck, without understanding what they are betting on.
Hock Tan, CEO of semiconductor manufacturer Broadcom, believes that a significant number of investors in the artificial intelligence industry behave in the same way as casino players — they rely solely on luck, without understanding what they are betting on.
According to Bloomberg, Hock Tan also questioned the long-term economic policies of AI companies, which are deeply unprofitable.
“A lot of investors have no idea what they’re investing in. They set very high expectations for themselves, and then they find out it’s all almost like a casino,” the Broadcom CEO said at an event in Singapore.
He disagrees with people rushing to invest in the technology, as AI companies like OpenAI are actually reporting billions of dollars in losses, and the industry has yet to find a sustainable business model for its services, which require huge investments in advanced chips, data centers, and model development.
"So far, they are still losing money because they spend a lot on education," stated Hock Tan.
Tan also warned that insufficient capital could be the next major constraint to the industry’s growth, adding that AI model developers need to find customers who can generate revenue from implementing the technology, rather than relying on users who are currently spending money on tokens to experiment with AI.
"When you’re a kid, you go to the video arcade, you play. Your parents give you $10 chips, you finish the game in 10 minutes and you haven’t learned anything. That’s what’s happening today," he compared.
Meanwhile, despite everything, in the third quarter, AI companies will become the main driver of US business profits.
