Steve Eisman calls AI safety fears garbage, urges IPO postponement
- Steve Eisman calls AI safety fears 'garbage' and urges firms to postpone IPOs if concerned
- Anthropic eyes a potential $2 trillion valuation with a $100 billion raise in its planned IPO
- Polymarket shows an 87% chance of Anthropic listing by December 31, 2026
- Eisman warns Nvidia faces risks if OpenAI or Anthropic weaken due to lack of moats
- Open-weight models and Chinese competitors are eroding pricing power for major AI labs
*this image is generated using AI for illustrative purposes only.
Big Short investor Steve Eisman dismissed fears of runaway artificial intelligence as "garbage" on Thursday, challenging AI companies to postpone their initial public offerings if they genuinely believe the technology is moving too fast.
Eisman told CNBC that he has stopped adding to his AI positions and trimmed some exposure. He warned that weakness at leading AI labs could ripple through Nvidia Corp (NASDAQ: NVDA) and the broader AI trade. Nvidia is considering investing as much as $10 billion as an anchor investor in Anthropic's planned IPO.
AI Labs and Moats
Eisman argued that AI labs lack a sustainable competitive advantage, or moat. He stated that "token maxing is over" and open-weight models are taking significant market share. These cheaper models allow developers to download and run them independently, offering cost-conscious customers an alternative to proprietary systems.
He suggested companies are trying to manufacture a crisis to create regulation that would establish a duopoly. In July, Eisman said he would be "petrified" running OpenAI or Anthropic as cheaper Chinese models threatened to pressure pricing.
Anthropic IPO Details
Anthropic is preparing what could become the largest IPO ever, potentially raising as much as $100 billion at a valuation around $2 trillion. This would roughly double the $965 billion valuation it received in a May funding round.
Polymarket gives Anthropic an 87% chance of listing by December 31, with about $3.2 million traded on the timing market. A separate market puts roughly a 73% chance on Anthropic closing its first trading day with a market cap of at least $2 trillion.
| Metric | Value | Source |
|---|---|---|
| Potential Valuation | $2 trillion | Reuters |
| Potential Raise | $100 billion | Reuters |
| May Funding Valuation | $965 billion | Reuters |
| IPO Probability by Dec 31 | 87% | Polymarket |
Nvidia Exposure
Eisman said Nvidia, hyperscalers, and the broader AI infrastructure buildout depend on OpenAI and Anthropic remaining healthy businesses. He called OpenAI "the weaker company" of the two.
OpenAI CEO Sam Altman said last week the company will not go public in 2026, citing safety work ahead. Eisman tied the delay to that weakness, stating, "If something were to happen to one of those two companies, then the chain would really fall apart."
What the Numbers Show
The divergence between Anthropic's potential $2 trillion valuation and Eisman's assertion that these companies have "no moats" highlights a tension between market pricing and fundamental business defensibility. While Polymarket data suggests high confidence in a successful listing, Eisman's warning implies that the infrastructure buildout depends entirely on the continued health of labs facing intense pricing pressure from open-weight and Chinese competitors.
How might the rise of open-weight models and cheaper Chinese competitors impact Nvidia's long-term revenue growth if AI labs lose their pricing power?
What specific regulatory measures could be enacted to protect proprietary AI labs from open-source competition, and how would this affect market dynamics?
If Anthropic's IPO faces delays or underperformance, what would be the immediate impact on investor sentiment toward other major AI infrastructure plays?
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