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“Big Short” investor Steve Eisman has begun partially hedging four artificial intelligence positions, a shift from August, when he said he was not shorting the trade, citing the industry’s dependence on OpenAI and Anthropic.
“I’ve played ball too. I’ve invested in these companies,” Eisman said on Prof G Markets. “I’ve taken some risk down.”
Eisman said that over the past month he “shorted part” of four AI-related holdings “against the box,” effectively adding partial short positions against stocks he already owns to reduce his exposure without selling them outright.
He did not name the four holdings and stressed he was not recommending the strategy.
‘Everybody’s in Trouble’
Eisman said his main concern is concentration rather than stock valuations.
He estimates roughly 70% of AI-related revenue at cloud giants Microsoft Corp. (NASDAQ:MSFT), Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL) and Oracle Corp. (NYSE:ORCL) comes from OpenAI and Anthropic.
“If anything bad happens to one of those two companies within the next year, everybody’s in trouble,” Eisman said, referring to the two AI labs.
A prospectus seen by Reuters this week showed Anthropic generated nearly $4.6 billion in 2025 revenue while losing more than $8 billion from operations. The company also disclosed $518 billion in future infrastructure obligations.
Eisman is watching whether cheaper open-weight models keep taking market share. He said there are “signs of a price war breaking out” and argues the leading AI companies lack durable moats.
Eisman Is Still Mostly Long
“I have some shorts. I’m mostly long,” Eisman said. “I took down some risk because I think like everybody else, I’m kind of nervous about the whole AI narrative.”
Making a major call that the AI story will implode remains “premature,” he said.
A Polymarket contract puts the chance of an AI industry downturn by June 30, 2027 at 18%. It requires at least three severe conditions to occur, among them Nvidia Corp. (NASDAQ:NVDA) closing 50% below its all-time high, a 40% drop in a major semiconductor ETF and a bankruptcy filing by OpenAI or Anthropic.
Asked about elevated stock valuations, Eisman said the AI narrative matters more. If it continues, he expects stocks to keep rising. If it breaks, he said the market could suffer a “huge correction.”
That is still far from how he remembers the financial crisis.
“I literally thought planet Earth was going to burn,” Eisman said of 2008.