Eisman hedges against AI downturn

Steve Eisman of The Big Short has gotten much more conservative in his portfolio. He has shorted against the box a whole bunch of positions to lower risk significantly, but remains net long overall.

“I've gotten much more conservative in my own portfolio. We have shorted against the box a whole bunch of our positions, so that our risk is much, much, much lower.”

Frontier AI models hiding weak fundamentals

Eisman believes frontier algorithm models are exploiting fear around their technologies to build competitive regulatory moats against cheaper products while obscuring faltering fundamentals. Anthropic left revenue figures blank in its IPO filing.

Capital efficiency deteriorating at Anthropic

Anthropic's revenue-to-equipment-expense ratio fell from two point zero eight in the second quarter to one point seven in the third quarter, marking a significant change in trajectory according to Eisman's analysis.

Too risky to short AI outright

Eisman fears betting against AI because it is so intertwined with the broader market and economy that the technology sector cannot be siloed away. Google's earnings report scared investors as AI queries reduced advertising monetization.

“It's impossible for the technology sector to be siloed away from the broader equity market and the rest of the economy.”