Intel and Broadcom CEOs say this will slow down AI and it is not chip shortage

The artificial intelligence boom has been held back by a shortage of chips and power, but the top bosses at Intel and Broadcom are now warning of a new roadblock: cold, hard cash. As tech giants race to build larger AI models and expand their infrastructure, the sheer cost of keeping up could soon become the industry's biggest constraint.Capital over chipsBroadcom CEO Hock Tan spoke about this issue at the DBS Asia Future Forward Conference in Singapore on Monday. He explained that while the industry has struggled with getting enough wafers, memory chips, and electricity, Tan noted that these physical shortages are starting to ease. He expects the memory chip shortage to improve within a year, while wafer production capacity and power infrastructure could stabilize by 2028 or 2029.However, the demand for computing power is so immense that the massive infrastructure required could continue to outpace supply through 2029 and possibly into 2030. To build this out, companies need unprecedented levels of funding."What I think might be the biggest constraint is capital," Hock Tan told the audience. The Intel perspectiveIntel CEO Lip-Bu Tan echoed these thoughts. He pointed out that borrowing money is getting expensive, and investors who are pouring billions into AI will soon want to see a return on their investment (ROI).“If there’s any challenge in the front, it’s capital and the cost of capital, and then the other part is in the long run, people want to see the ROI,” Lip-Bu Tan explained. He mentioned that while AI demand will stay strong for the next two to three years, companies will eventually need to prove that their AI tools are actually helping businesses make money or work faster. If the technology fails to deliver real economic benefits, the massive spending on AI infrastructure could slow downMassive financing deals underwayThe warning comes at a time when chipmakers are stepping in to help fund the very companies buying their products.According to reports, Broadcom is currently in early talks to arrange over $50 billion in debt financing for OpenAI. This massive sum would help the ChatGPT maker fund the purchase of custom AI chips being co-developed with Broadcom.Similarly, Broadcom is reportedly lending up to $42 billion to Anthropic, another leading AI firm, to help finance its infrastructure spending. By 2027, Anthropic is expected to become the largest customer for Broadcom’s chip-design business.While frontier AI companies like OpenAI and Anthropic are proving they can generate real revenue with their latest models, keeping the AI revolution alive over the next five years is going to require an astronomical amount of money. The next big race isn't just about who builds the smartest AI, it's about who can afford to keep it running.- Ends