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Eisman's AI bombshell: "If OpenAI and Anthropic collapse, we have a problem" – Price war coming from China

Eisman's AI bombshell:
Eisman's commentary reinforces the debate surrounding the sustainability of massive investments in artificial intelligence
 Steve Eisman is sounding the alarm over the boom in artificial intelligence, arguing that its future depends increasingly on the success of just two companies: OpenAI and Anthropic. The investor, who became widely known for his bet against the housing market just before the global financial crisis, estimates that the two artificial intelligence startups represent roughly 70% of AI-related revenues for Microsoft, Amazon, Google, and Oracle. At the same time, he estimates that they account for around 25%-35% of their total cloud services revenues. "In a sense, the future of these massive companies is a bet that OpenAI and Anthropic will succeed," Eisman said late Tuesday, speaking on CNBC's "Fast Money." The host of "The Real Eisman Playbook" podcast and former senior portfolio manager at Neuberger Berman considers that one of the biggest threats to industry revenues could originate from China.

As he explains, Chinese open-source models are significantly cheaper and already appear to be gaining traction in the market. "The Achilles' heel of this entire story is the possibility that something negative happens to Anthropic and OpenAI. Chinese open-source and open-weight models are much cheaper. If they start taking significant market share—and from what I hear, it seems they already are—we could be led into a major price war. And then we have a problem," he noted. Eisman's commentary reinforces the growing debate surrounding the sustainability of massive tech spending and whether these expenses can ultimately be converted into correspondingly high profits. An even more pessimistic stance has been adopted by Michael Burry, the investor made famous by his bet against the housing bubble depicted in the movie The Big Short. Burry has expressed doubts regarding whether current and future demand for artificial intelligence technologies truly stems from end users. Instead, he argues that a significant portion of demand may rely on what he has characterized as circular deals and interconnected transactions. At the same time, Burry has taken investment actions reflecting his bearish outlook. He has established short positions against some of the largest beneficiaries of the AI boom, including Nvidia, while also revealing bearish positions tied to the broader semiconductor sector.

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