Broadcom's Hock Tan calls the AI trade a casino, then helps fund the bets

Broadcom (NASDAQ: AVGO) CEO Hock Tan told a Singapore audience on October 12 that many AI investors behave like casino gamblers. Tan’s comment helped drag Asian chip stocks lower on Tuesday. His own company, meanwhile, is arranging billions in loans so its customers can keep buying the chips he says they barely understand.

What are investors out of the loop about? Broadcom’s CEO Hock Tan, speaking at an event in Singapore, said that investors have “extreme expectations. ” He also added that a lot of investors have no clue what they are investing in.

Tan likened companies splurging on AI experiments to a child handed $10 of arcade tokens who burns through them in ten minutes without learning anything. He also questioned the economics of AI labs that are losing money, pointing out that OpenAI’s roughly $50 billion annualized revenue as of September shows demand but, with heavy training costs, says little about long-term profit. Tan’s comments include him in a crowd of insiders who have flagged a possible AI bubble, including OpenAI’s Sam Altman, Amazon’s Jeff Bezos and Google’s Sundar Pichai.

South Korea’s KOSPI was hit the hardest following those comments, dropping more than 6% on Tuesday. Japan’s Nikkei 225 lost close to 3%, with SK Hynix and Samsung leading the declines. China’s memory chip maker CXMT also contributed to the decline.

The company has been taking market share from Korean companies. It reached 10% of global DRAM revenue in the second quarter of 2026, up from 4% a year earlier, and is now moving into LPDDR6 and NAND flash chips. NASDAQ futures also fell.

Why is Broadcom assisting AI companies? Tan gave his warning while his company, Broadcom, expects its AI chip revenue to grow about four times, from roughly $58 billion this fiscal year to $230 billion by fiscal 2028. In September, Broadcom reported $29.

6 billion in revenue for the third quarter, up 86% from a year earlier. Its AI chip sales were $16. 7 billion, up 221%.

Growth this big depends on large cloud companies and AI labs like OpenAI. Broadcom is reportedly pursuing more than $50 billion to finance OpenAI’s custom processors. The company has promised to lend up to $42 billion, based on Anthropic’s computing capacity.

It is also backing part of a $60 billion bank loan, which should help Anthropic borrow money at lower cost. Broadcom and OpenAI’s ties run deep. The two signed a collaboration in 2025 to deploy 10 gigawatts of OpenAI-designed accelerators using Broadcom networking, with Tan calling it “a pivotal moment in the pursuit of artificial general intelligence.

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