AI infrastructure demand continues to outpace supply, but Broadcom Inc. (NASDAQ:AVGO) and Intel Corp. (NASDAQ:INTC) CEOs say financing could become the industry’s next major constraint.
Broadcom CEO Hock Tan and Intel CEO Lip-Bu Tan raised concerns on Monday at the DBS Asia Future Forward Conference in Singapore. ″[What] I think might be the biggest constraint is capital," Hock Tan said, reported CNBC.
The CEO said securing capital could prove more difficult than overcoming shortages involving semiconductors, memory or electricity as companies continue expanding AI infrastructure,
At the same time, Lip-Bu Tan pointed to elevated borrowing costs and uncertainty about whether businesses investing heavily in AI will generate enough returns to justify their spending.
"If there’s any challenge in the front, it’s capital and the cost of capital, and then the other part is in the longer run, people want to see the ROI," he said.
Both executives said some supply pressures could ease as manufacturing capacity grows. Hock Tan suggested wafer shortages may improve by 2028 or 2029, while computing demand could exceed supply through 2029 or 2030, as per the report.
Lip-Bu Tan said a substantial slowdown appears unlikely over the next two to three years, although longer-term expansion will depend on business adoption, efficiency gains and measurable economic benefits.
Dalio Warns of AI Bubble as AWS Pushes Back
Last week, billionaire investor Ray Dalio warned that surging AI-related borrowing, rising interest rates and pressure to turn paper wealth into cash are bringing markets closer to a potential AI bubble burst.
He called the AI boom a "classic bubble," saying markets are approaching the point when heavy debt and higher rates could trigger a downturn. He compared the current boom to the late 1920s, noting that bubbles often emerge alongside major technological innovations.
Amazon.com Inc. (NASDAQ:AMZN) AWS CEO Matt Garman dismissed concerns about an AI spending bubble, citing diversified customer demand, growing production workloads and positive returns businesses are seeing from AI investments.
Broadcom, Oracle Pursue AI Chip Funding
Earlier this month, a report stated that Broadcom is seeking more than $50 billion in financing from investors, including Apollo Global Management and Blackstone, to fund custom AI chips for OpenAI, supporting several gigawatts of computing capacity. The preliminary deal is expected to close by year-end, though the amount could change.
Separately, Oracle is pursuing funding for a major chip purchase. Broadcom and OpenAI unveiled their first custom AI inference chip, Jalapeño, in June as part of OpenAI’s pepper-named Nexus chip initiative.
In August, Intel priced its upsized public offering of 210.5 million shares at $95 per share, raising approximately $20 billion, up from the initially planned $15 billion. The company also granted underwriters a 30-day option to purchase up to 31.6 million additional shares at the offering price, less underwriting discounts.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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