Broadcom boss likens AI investing to a 'casino' and triggers a brutal global chip stock sell-off

Broadcom chief executive Hock Tan warned that many AI investors "have no clue" what they are putting their money into, comparing them to children spending tokens at a video arcade. South Korea's Kospi index tumbled 6.25% after his remarks spread, with Samsung shares dropping 7.4% and memory chip maker SK Hynix falling 10%. Japan's SoftBank lost 8.5% and chip equipment maker Tokyo Electron fell 7.15% as the sell-off swept Asian markets. Analysts are calling it a "brutal session" that signals the AI trade may be turning.

Tan said AI is currently "still losing money" and warned that a lack of capital will be the industry's next major obstacle to growth.

Chinese chip maker CXMT's claim of strong progress on new memory architecture spooked investors already worried about a challenge to Samsung, SK Hynix and Micron.