Asian chip stocks suffered steep declines on Tuesday after Broadcom CEO Hock Tan compared modern artificial intelligence investing to a casino. The remarks coincided with news of memory chip progress from China’s CXMT, rattling markets heavily exposed to the AI infrastructure boom.
Asian Markets Stumble as Broadcom CEO Warns of Speculative Overreach
The sell-off rippled across global semiconductor shares on Tuesday, with Asian chip stocks taking the brunt of the reaction following comments made by Broadcom CEO Hock Tan at an industry event in Singapore. South Korea’s benchmark Kospi index tumbled 6.25%, driven lower by heavyweights SK Hynix and Samsung Electronics, which fell 10% and 7.4% respectively.
Other regional markets felt the shockwave. Japan’s Nikkei index dropped 1.8%, while the Taiwan exchange lost almost 2% alongside a comparable decline for chip maker TSMC. Japanese equipment maker Tokyo Electron fell 7.15%, and SoftBank Group lost 8.5%.
On Wall Street, trading opened with more restrained movement. The tech-heavy Nasdaq fell more than 100 points, or 0.35%, to 30,556. Micron Technology slid 4.8%, Advanced Micro Devices dropped 1.4%, Nvidia lost 0.8%, and Broadcom slipped 0.2%. Meanwhile, the Dow Jones industrial average rose nearly 0.4%, and London’s FTSE 100 hit a three-week high, rising 0.73% to 10,762 amid retreating oil prices and easing bond yields.
Hock Tan Likens AI Investors to Casino Gamblers Wasting Arcade Tokens
The market friction stems directly from the language used by the head of a major infrastructure supplier. Tan told attendees in Singapore that a lot of AI investors have no clue what they are investing in, pointing to runaway market sentiment.
“They set very extreme expectations only to find out that it’s almost like they are in a casino.”
Hock Tan, the chief executive of the US chip maker Broadcom, via The Guardian
Tan expanded the metaphor to describe enterprise AI spending patterns, comparing the outlay to a kid blowing through arcade tokens provided by parents, finishing them in 10 minutes without acquiring lasting knowledge.
The warning carries weight because Broadcom itself sits at the center of the hardware buildout. The company is forecasting that its artificial intelligence chip revenue will quadruple, rising from approximately $58 billion in the current fiscal year to $230 billion by fiscal 2028.
AI Developers Face Financial Losses from Training Costs
Underpinning the executive’s caution are the financial realities facing major labs. Prominent artificial intelligence developers, including ChatGPT maker OpenAI, remain unprofitable as they pour vast resources into training frontier models.
“For now it’s still losing money because they’re spending a lot on training. 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.”
Hock Tan, the chief executive of the US chip maker Broadcom, via The Guardian
Tan noted that significant enterprise revenue originates from pilot projects rather than permanent infrastructure commitments. Compounding investor unease, Chinese memory chip maker CXMT announced notable progress on a new DRAM architecture designed to boost memory density.
Market participants worry about mounting competition. CXMT expanded its share of global DRAM revenue to 10% in the second quarter of 2026, up from 4% a year earlier, and is actively pushing into LPDDR6 production while preparing a move into NAND flash. This puts the Chinese firm in direct competition with established industry leaders Samsung, SK Hynix, and Micron.
