Broadcom CEO Hock Tan questioned whether investors and businesses understand what they are paying for as artificial-intelligence spending accelerates. Speaking at an event in Singapore, Tan said many investors had little grasp of their bets and set expectations so high that the market could resemble a casino, Bloomberg reported.
The arcade-token problem
Tan applied a similar critique to corporate AI experiments. He compared enterprise use of AI tokens with a child spending $10 in arcade tokens within minutes and learning nothing, according to Quartz. His point was not that AI lacks commercial potential, but that spending alone does not prove that a business has found a productive use for it.
He pointed to OpenAI’s annualized revenue reaching $50 billion in September as an encouraging sign for frontier models. Tan also said those labs were still losing money because of the cost of training new models, leaving their long-term economics unsettled.
Broadcom is still betting on the buildout
Tan’s criticism did not amount to a retreat from AI infrastructure. Broadcom designs chips used in data centers and has benefited directly from the construction boom. In September, Tan maintained projections for the company’s AI semiconductor revenue to reach $115 billion in fiscal 2027 and then double to $230 billion in fiscal 2028.
He also warned that capital could become the industry’s next constraint. The concern is practical for companies trying to finance enormous data-center and chip purchases, even as suppliers such as Broadcom continue to forecast rapid growth.
