Steve Eisman, known for “The Big Short,” believes the artificial intelligence trade is nearing a tipping point but is not yet willing to bet outright against it. He has significantly reduced his exposure by hedging several positions without maintaining a net short position. His primary concern involves the profitability of frontier algorithm models, which he believes use fear to establish a competitive regulatory moat. At Anthropic, the revenue-to-equipment-expense ratio reportedly fell from 2.08 in the second quarter to 1.7 in the third, while the IPO filing omitted several financial metrics. At Alphabet, the shift from traditional internet searches toward AI queries and the resulting weakness in advertising drove a sharp decline in the company’s shares, reinforcing Eisman’s concerns about the broader sector.
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