Nasdaq futures fell 0.3% after Hock Tan compared AI investors to casino gamblers, sparking a sell‑off that rippled through Asian markets.
Tan, CEO of the global data‑center infra giant, warned that many AI‑focused investors lack a clear grasp of the technology’s economics, citing OpenAI’s $50 billion annualized revenue as evidence of potential, but not of long‑term profitability. He added that AI labs are still net‑losing due to heavy training costs.
The comment rattled chip stocks across the region: Korea’s KOSPI plunged over 6%, while Japan’s Nikkei 225 slid nearly 3%. The losses were felt most acutely by the likes of SK Hynix and Micron, whose shares dropped sharply on fears that AI spending will stay a drain rather than a driver of revenue.
Broader market sentiment is further souring because of rising competition from Chinese chipmaker CXMT, which announced progress on a new chip that Korean giants are also chasing. Investors now question whether the chip sector can sustain its current valuation multiples amid uncertain demand for AI hardware.
Looking ahead, traders will keep a close eye on the next earnings cycle for key chipmakers and on any guidance regarding AI‑related capital expenditures. The market seems poised for a cautious approach as it weighs the prospects of AI‑driven growth against the cost of building and training next‑generation models.