Prof G Markets · Thursday, August 6, 2026
Steve Eisman discusses the capital-intensive nature of the AI business, noting that companies like Microsoft, Google, and Amazon are experiencing negative cash flow due to massive investments. He points to the lack of clear moats in LLM AI and the emergence of cheaper Chinese models as potential risks.
“The businesses, much more capital intensive than anybody possibly could have imagined. You know, companies like Microsoft and Google and and Amazon. You know, companies who once threw off cash like it was water, have negative cash flow.”
“And I think the other major change is that the LLM agetic AI business, which is Brilliant, anthropic and really just a few other people. Doesn't seem to have any moats around it.”
“So if if if this is where my thinking is going, and I think it's premature, but if there was a major price war broke out, because of the Chinese models and OpenAI and Anthropic got into big trouble, that would unwind a lot of the AI trade.”