On October 12th in the US stock market, several stocks in the AI semiconductor industry chain declined. NVIDIA (NVDA.O) fell by 1.29%, Broadcom (AVGO.O) fell by 1.88%, ASML (ASML.O) fell by 1.69%, AMD (AMD.O) fell by 2.28%, and ARM (ARM.O) fell by 4.15%. Among storage stocks, SanDisk (SNDK.O) fell by 5.97%, Micron Technology (MU.O) fell by 3.88%, Seagate Technology (STX.O) fell by 3.8%, Western Digital (WDC.O) fell by 2.6%, and SK Hynix (SKHY.O) fell by 4.02%.
On the news front, during the DBS Asia Future Forward Conference held in Singapore on Monday local time, Broadcom and Intel CEO expressed their views regarding the bottlenecks in the development of AI. Both mentioned that financing could become a major constraint for the expansion of AI.
Broadcom's CEO Chen Fuyang stated that as the industry competes to build the infrastructure necessary to power models, financing may become a greater obstacle to AI expansion than semiconductor shortages, memory chips, or power shortages. Capital could be the biggest limiting factor.
Intel's CEO Chen Liwu mentioned that the capital cost of AI company is rising, and people are also questioning whether companies that make large investments in AI can generate sufficient returns. 'If there is any challenge ahead, it is capital, and the longer-term issue is that people hope to see a return on investment.'
Previously, the industry was more concerned with whether the production of hardware devices in the AI industrial chain could support the construction of AI infrastructure. Chen Fuyang stated that over the past two years, the industry has repeatedly encountered supply bottlenecks, but with the expansion of production capacity, some of these constraints will be alleviated. For example, the current storage shortage may no longer exist in a year, and the wafer shortage could be resolved by 2028 or 2029. Power supply will also improve with the deployment of new infrastructure.
Not only Broadcom and Intel, but NVIDIA has also recognized the financing needs of AI manufacturers and has become involved in the financing aspect of the AI industry chain. In August, NVIDIA announced strategic partnerships with Apollo, BlackRock, Fortress Investment, Goldman Sachs, and KKR to establish an independent financing platform, mobilizing over $500 billion in third-party capital to support the construction of AI infrastructure.
Recently, there have been reports that Botong is in preliminary discussions regarding a $50 billion debt financing deal to help OpenAI raise funds for the development and procurement of custom chips.
The deep equity ties and cooperative relationships between multiple semiconductor companies and AI manufacturers are the backdrop to semiconductor firms' concerns about whether the financing capabilities of AI manufacturers can support infrastructure construction. Broadcom collaborates with OpenAI, Google, and several other AI manufacturers to develop customized AI chips; AMD is a supplier of chips and rack-level systems for multiple AI manufacturers; NVIDIA is a shareholder and computing power provider for OpenAI.
Even as the industry faces financial challenges, Broadcom and Intel CEO remain optimistic about the future demand for AI infrastructure. Chen Fuyang stated that the demand for computing infrastructure has exceeded the company's supply capacity, and this imbalance between supply and demand may continue until 2029 or even 2030. Chen Liwu, on the other hand, believes that with the widespread adoption of AI applications and the growing demand for computing power, it is unlikely that there will be a significant slowdown in industry development in the next two to three years.
