“Big Short” investor Steve Eisman warned on CNBC’s “Fast Money” on August 13 that OpenAI and Anthropic account for roughly 70% of AI-related revenue at Microsoft, Amazon, Google, and Oracle, and as much as 25% to 35% of those companies’ cloud revenue. “The futures of these massive companies, in a sense, are a bet that OpenAI and Anthropic are going to succeed,” Eisman said. He called the concentration the “Achilles’ heel” of the AI trade, warning that if something goes wrong at either lab, cheaper Chinese open-weight models could spark a price war across the industry. Eisman said he is not shorting the trade yet, since he wants financial data once the labs go public.
NVIDIA Corporation (NASDAQ:NVDA) and Palantir Technologies Inc. (NASDAQ:PLTR) sit on opposite sides of that same concentration risk. Nvidia supplies the chips every AI lab needs regardless of who wins, while Palantir is betting that companies want to reduce their reliance on any single AI lab altogether.
Bull Case
Palantir Technologies Inc. (NASDAQ:PLTR)’s results argue against it being just another concentration bet. Revenue rose 93% to $1.94 billion last quarter, beating the $1.80 billion expected. Palantir raised full-year guidance to $8.15-$8.158 billion, its largest-ever raise, the company said. U.S. commercial revenue grew 149% to $764 million, showing broad-based demand.
Palantir’s sovereignty pitch carries real weight beyond marketing. CEO Alex Karp wrote that “our customers have declined to become vassal states of the language labs. Karp joined other tech leaders urging the government not to restrict open-weight AI models, widening customer choice beyond the two labs Eisman flagged.
NVIDIA Corporation (NASDAQ:NVDA)’s chips stay necessary no matter which lab wins. Every hyperscaler, OpenAI, Anthropic, and any challenger still needs Nvidia hardware. Eisman’s warning centers on the labs’ finances, not Nvidia’s chip business itself.
NVIDIA Corporation (NASDAQ:NVDA) has moved to insulate itself from the concentration risk critics describe. It signed deals with Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs, and KKR to mobilize over $500 billion in third-party AI financing, with CEO Jensen Huang capping Nvidia’s exposure at roughly 25% per project.
Nvidia is also generating real cash, not just accounting growth: close to $48 billion in free cash flow last quarter, with room to absorb a slowdown at any one customer.
Bear Case
Michael Burry argues Nvidia’s own customer base carries a version of Eisman’s concentration risk. He has focused on Nvidia’s reliance on a small group of hyperscale customers, including Microsoft, Meta, Amazon, and Alphabet, warning a pullback from even one could meaningfully hurt revenue.
