Investor Steve Eisman has warned that the artificial intelligence boom is becoming increasingly dependent on the fortunes of just two companies that is OpenAI and Anthropic.
Eisman, best known for betting against the US housing market before the global financial crisis, said the two AI startups account for roughly 70% of AI-related revenue at Microsoft, Amazon, Alphabet’s Google and Oracle. He said they also account for as much as 25% to 35% of the companies’ cloud revenue.
“The futures of these massive companies, in a sense, are a bet that OpenAI, Anthropic are going to succeed,” Eisman told CNBC.
China could pose a threat
Eisman said the biggest threat to the AI boom could come from China, where open-source and open-weight AI models are significantly cheaper.
He said these models appear to be gaining market share, which could put pressure on AI companies and their pricing.
“The Achilles heel of this whole story … is if something bad happens to Anthropic and OpenAI … the Chinese open end models, open weight models are much cheaper. And if they start really taking a lot of market share and it sounds like, from what I’m hearing, that they’re starting to, you could have a big price war. And then we have a problem,” he told CNBC.
Eisman raises questions over AI spending
Eisman’s comments come amid a lot of debate over whether the enormous spending on artificial intelligence will generate enough returns for the companies investing in it.
Investor Michael Burry has also taken a bearish view of parts of the AI boom, questioning whether current and future AI demand is ultimately coming from end customers. He has also disclosed bearish positions linked to Nvidia and the broader semiconductor sector.
Eisman’s concern is focused on the concentration of the AI story. With major technology companies increasingly relying on OpenAI and Anthropic for AI-related growth, he believes any major setback for the two startups could have consequences for the technology and cloud sectors.