'Big Short' investor Steve Eisman sees an Achilles heel in the AI boom
Steve Eisman, the investor who famously shorted the housing market before the global financial crisis, has identified a potential vulnerability in the artificial intelligence boom. According to Eisman, the future success of major technology companies, including Microsoft, Amazon, Alphabet's Google, and Oracle, is increasingly tied to the fortunes of two AI startups: OpenAI and Anthropic. These two companies are responsible for a substantial portion of the AI-related revenue generated by these tech giants, accounting for roughly 70% of their AI revenue.
KEY Players Emerge
Eisman's comments, made during an appearance on CNBC's "Fast Money" on Tuesday, highlighted the significant role that OpenAI and Anthropic play in the AI sector. He noted that the two startups also contribute a substantial percentage of the cloud revenue for these companies, ranging from 25% to 35%. This level of dependence on two relatively small companies is a significant risk, as the failure of either OpenAI or Anthropic could have a major impact on the financial performance of these tech giants. As Eisman put it, "The futures of these massive companies, in a sense, are a bet that OpenAI, Anthropic are going to succeed."
The investor, who is also the host of "The Real Eisman Playbook" podcast and a former senior portfolio manager at Neuberger Berman, believes that one of the biggest threats to the dominance of OpenAI and Anthropic comes from China. Chinese open-source AI models are significantly cheaper than those offered by the two startups, and they appear to be gaining market share. This could potentially disrupt the revenue streams of Microsoft, Amazon, Alphabet's Google, and Oracle, which are heavily reliant on the success of OpenAI and Anthropic. Eisman's warning suggests that investors should be cautious when evaluating the prospects of these tech giants, as their fortunes are increasingly tied to the success of two smaller companies in a highly competitive and rapidly evolving sector.
Risks and Consequences
The AI boom has been a major driver of growth for many technology companies in recent years, with Microsoft, Amazon, Alphabet's Google, and Oracle all investing heavily in the development and deployment of AI technologies. However, Eisman's comments suggest that this growth may be more fragile than it appears, and that the failure of OpenAI and Anthropic could have significant consequences for the entire sector. As the host of "The Real Eisman Playbook" podcast, Eisman has built a reputation for identifying potential vulnerabilities in the market, and his warning about the AI boom should be taken seriously by investors and industry observers alike.
The fact that OpenAI and Anthropic account for such a large percentage of AI-related revenue at Microsoft, Amazon, Alphabet's Google, and Oracle is a testament to the significant role that these two startups play in the AI sector. However, it also highlights the risks associated with this level of dependence on two relatively small companies. As the AI market continues to evolve, it will be important for investors to monitor the performance of OpenAI and Anthropic, as well as the broader competitive landscape, in order to assess the potential risks and opportunities in this sector. Eisman's warning serves as a reminder that even in a rapidly growing market, there are always potential vulnerabilities that can have a significant impact on the fortunes of individual companies and the sector as a whole.
Source: cnbc.com · 2026-08-13