Former Neuberger senior portfolio manager Steve Eisman has cut portfolio risk amid concerns about frontier AI models, while saying the technology sector is tied to the wider market and economy, CNBC reported Thursday.
Speaking on CNBC's “Squawk Box,” Eisman said he had reduced risk by taking short positions against many of his existing holdings. He said he was not net short overall. That leaves him wary of particular exposures without making a broad bet against the AI trade.
Eisman's concern focuses on frontier AI models and their financial footing. He argued that developers may be drawing on public anxiety about AI to support rules that create a competitive regulatory moat against lower-cost products, while distracting from weakening fundamentals. He also questioned whether revenue is keeping pace with equipment costs.
CNBC reported that Anthropic omitted its latest revenue figures from its initial public offering filing. Eisman expects those figures to show a sharp slowdown from the previous quarter. He cited an analysis he had received that placed the company's revenue at 2.08 times equipment expense in the second quarter, compared with 1.7 in the third. He described the figures as evidence of a capital-efficiency problem.
Eisman criticized the filing's limited disclosures on the coming quarter, saying they did not allow a clear reading of Anthropic's financial position. He called the relevant portions “extremely negative.”
He said the AI trade was difficult to assess in isolation because the technology sector is intertwined with the wider equity market and economy. CNBC quoted him saying much of the market remained on the “other side” and was still “reading tea leaves” as investors assessed the evidence.
CNBC reported Alphabet shares fell after the company's earnings Wednesday and described a slowdown in its core advertising business amid rising use of AI queries across Google products. Google Chief Business Officer Philipp Schindler said increased use of AI mode had affected monetization because it was lower in that format. He said Google's advertising experiments had shown promising results.
