The artificial-intelligence boom is sold to investors as one of the broadest technology shifts in decades. And a shockingly substantial part of the answer may lie with just two corporations, says Steve Eisman. The investor best known for betting against the U.S. housing market before the financial crisis told CNBC that OpenAI and Anthropic account for roughly 70% of AI-related revenue at Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL) and Oracle (ORCL).
He also estimated that the two startups may represent roughly 25% to 35% of cloud revenue at those companies. Eisman views that concentration as the "Achilles' heel" of the AI trade. The problem is not that demand for artificial intelligence would evaporate quickly.
However, the economics could change quickly if cheaper rivals gain the upper hand and launch a price war. Eisman notably mentioned Chinese open-source and open-weight AI models, which he argued are far cheaper and starting to gain share. That leaves investors with a bigger question regarding AI growth.
If hyperscalers are spending hundreds of billions of dollars to serve AI demand, how much of the return on that investment is dependent on a small number of customers continuing to expand at extraordinary rates? "The futures of these massive companies, in a sense, are a bet that OpenAI, Anthropic are going to succeed," Eisman said on CNBC. Microsoft, Amazon, Google, and Oracle have all spent extensively to expand their AI infrastructure.
Cloud capacity is one of the main beneficiaries of the development in AI, as startups and corporations rent access to pricey computer resources instead of building their own infrastructure from scratch. That is a powerful growth engine for hyperscalers. It also leads to customer concentration.
If Eisman's estimate is right, then both OpenAI and Anthropic make up an exceptionally substantial share of AI-related revenue across several of the world's major cloud firms. That's important because investors frequently think of cloud demand as spread over thousands of clients. AI demand may be significantly more focused.
Extract — continue reading at the source.
