Steve Eisman: One Company Could Break The AI Boom

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That's X-E-R-O dot com. Interrupted sleep, headaches, constant fatigue. For a lot of women, these aren't three separate issues. In perimenopause and menopause, they're often the same hormonal story. And you don't have to quietly push through. Midi can help. Because your symptoms have answers. Visit joinmidi.com. With code VOX right now to book your first visit today. That's joinmidi.com, code VOX to book your first visit. Join midi.com, code VOX. Insurance coverage varies. Check with your plan for coverage. Listen to me. Markets are bigger than us. What you have here is a structural change in the world's distribution. Cash is trash. Stocks look pretty attractive. Something's going to break. Forget about it. Good day to you all. We'll see you next time. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Welcome to Profiteer Markets. This week marked the end of the third quarter, and there is a lot to unpack. We had AI researchers warning that the technology could pose an existential threat to humanity. The Fed raised rates for the first time in three years. Treasury yields hit multi-decade highs, and we started to get a sense of what we're going to see in the anthropic IPO. Those are just a few of the highlights. So we wanted to take a step back and break down what happened this quarter, what the biggest takeaways are, and what we can expect heading into the final quarter of the year. So to help us make sense of it all, we are joined by a guest who has been helping us navigate this year's headlines and separate the signal from the noise. Here is our conversation with Steve Eisman, investment analyst, portfolio manager, and big short legend. Steve, great to have you back on the show. I want to start with a clip that you went very viral for. Uh, this was from your recent interview. Your recent interview on CNBC, where you all were discussing all of these doomerist threats from these AI companies saying that, you know, there's a 10% chance that humanity will go extinct because of AI or even higher probability ratings. You had a very interesting take on the matter. A lot of people heard it. I'm going to play it and we'll get your reaction. The idea that this whole Terminator thing is nonsense. So I think something completely different is going on. And what I think is happening is that token maxing is over. The open weight models are taking big market share. I think these companies are very nervous. They realize that there are no moats around their business whatsoever. And they're trying to manufacture a crisis that will create regulation and that they think they can then manipulate to create the moats, to create the duopoly that they want. Talk more about what you mean by all of that. Well, I didn't know that went viral. Thanks for letting me know. It did. It did. You know, I grew up reading a tremendous amount of science fiction, like an insane amount. And I'm just amused by the fact that I think all these people who live in Silicon Valley basically read almost as much science fiction as I did. They just take it very seriously. And that's funny, but I think also true. I mean, the idea that AI — first of all, there's absolutely no evidence whatsoever that AI is anywhere close to AGI. None. Absolutely none. I mean, what AI is, is like a next-word retrieval model. That's what it is. It doesn't think. And there's no evidence at all that it's ever going to think. Now maybe one day it will. But even so. Somehow that is going to literally create Terminator, I think is insane. By the way, I re-watched Terminator 1 and Terminator 2. Still good. Okay? I enjoyed both movies enormously, even though the sci-fi effects obviously weren't so great anymore. You know, when somebody says that the world's about to end, I just don't take it seriously. So I have to — I ask myself, okay, if they really don't believe. That the world's going to end — I mean, maybe some of them do, but I don't think any of the senior people really do — what's really going on? And you know, what has changed in the last six months or so is, you know, if we were going back six months, token maxing was going crazy. I mean, employees at firms were basically told, "Use AI. Use it until you're ill. And then use it some more." And we're going to track you, and we're going to put you on a leaderboard. I'm going to track you to make sure that you are using AI 24/7. And what happened was, they blew through their budgets within months. So sometime this summer, I think token maxing probably ended. I think everybody who uses AI, which is a lot of enterprises, have gotten a lot more cost-conscious. And at the same time, the open weight model. Sales have really come into their own, and as far as I can tell, are starting to take very, very large market share. So if I was anthropic and open AI, I'd be nervous, because I had everything to myself, and now I don't. So what can I do about that? So if I can manufacture a crisis where there's regulation, and then the regulators come in, and I can manipulate them so that we don't want the open weight models, all of a sudden I've got a duopoly. And that's what I think this is really all about. Well, this is very relevant to the news that we just got this week, which is we now have some insight into how Anthropic is doing as a business. This was the reporting from Reuters. Who knows, by the time this episode comes out, maybe the S1 will actually be fully out. But what we know about Anthropic as a company, last year they generated $4.6 billion in revenue, up more than 1,000% from 2024, extraordinary revenue growth. But their operating losses came out to more than $8 billion. And their net loss, which has a giant caveat, which is that a big portion of this number was a non-cash charge tied to revaluing these financing instruments, but still, the net loss was almost $42 billion. $8 billion on an operating basis. So we should probably pay most of our attention to the $8 billion. $8 billion is bad enough. We don't need to pursue the 40. Yes. We'll stick with the eight, because there are no asterisks there, no caveats. That is a real number. That is how much they're losing or they lost last year just from day-to-day operations. What do you make of those numbers? What does it say about the AI business and does it confirm your suspicions related to crisis manufacturing? I don't think the 2025 numbers matter. Okay. I think what I want to see is, I actually have another conspiracy theory, which is the reason why Anthropic is going public now, and I'm not 100% sure I'm right here, but if I am right, it's a good one, which is that I think Anthropic might be going public now, because the first half of the year looks really good. Because of token maxing and the lack of open weight models. And maybe, maybe, when they report their third quarter numbers, which they won't have to report when they do the IPO, because it's before the third quarter, it'd be too early, the third quarter numbers might show something of a slowdown, because of the end of token maxing. I actually think by the fourth quarter, we'll definitely see a slowdown, and so I think they need it to go public now. I'm more interested in competition. Comparing the first half of 2026 versus the second half. Do you take anything from the 2025 numbers, or do you think that we purely need to understand what's going on right now? Because to be clear, we don't know anything about how they've done in 2026. We've heard some rumors in some of the reporting. There was, of course, the reporting that they might have achieved adjusted operating profitability on a quarterly basis, but then we kind of dig into what does the adjusted operating profitability actually mean, and there are some big questions there. I mean, what are you looking for right now? we can glean from the current information that we have to understand how this business is actually doing? I don't think the current, the information that came out in Reuters about 2024 and 2025 is going to be all that relevant to people. People are going to want to look at 2026, and they wouldn't want to compare what the company is saying by the second half versus the first half of 2026. I think that's the most relevant. This crisis manufacturing, do you think that these companies are actually in trouble, or do you think that they think that they're in trouble? I really don't know. I think they're nervous. You know, how in trouble are they are at this point? I don't know. I think they see that they're losing market share. I think that, you know, you're starting to see signs of a price war breaking out by all the various players, which is very bad. I think what I said on CNBC, that this business has no moats, I think is really true. You know, Google, with its search, had a moat that was insurmountable for decades. None of these companies have any moats. You know, one day one model is up, next day another model is up. One day Muse is up, the next day somebody else will be up. You know, there's no, there's nothing protecting what you're doing. Does that indicate then the possibility of a bubble? I mean, you are famous for predicting the bubble in 2008. Um, where are you in your, in your perspective on the possibility of the existence of an AI bubble at this point? What worries me is the concentration risk. Because, I mean, if you look at NVIDIA, for example, and you look at, you know, NVIDIA had revenue growth of over 100%, but 70% of their accounts receivable were from five accounts. You know, if you look at the hyperscalers, 70% of their AI revenue, is from OpenAI and Anthropic. The whole, the whole chain basically flows to Anthropic and OpenAI. If those two companies succeed, you know, we'll be back in a year from now and saying, wow, AI is really, really triumphing. But if there's a problem with those two companies, then I think the whole chain is in trouble. I'm wondering what you make of current valuations in tech, because, you know, I have been thinking about and looking at this circular financing problem for a long time, and the concentration risk problem, which to me, as you say, it seems like a very big deal. But I wonder the extent to which that is actually priced in. And something we've been talking about on the show is the fact that NVIDIA on a forward earnings multiple basis is actually quite cheap compared to the past several years. Do you think this is a dynamic that Wall Street understands quite well? Do you think that investors have their heads wrapped around these risks? And do you think that they are pricing it in? I love when people ask me that question, because my answer to that question is I have no freaking idea. I mean, my answer is like, like, we would need to have like a massive group therapy session where we're all, all 1 million of us are in a room and we pay, you know, we pass the baton and say, hey, what are you thinking? I never, I literally never know what is and is not priced into the market. Never. I, you know, I, what I, what I do think is that there's a narrative about AI that's positive. And then there's a narrative about AI that's negative. And it's not clear to me which one of those is going to succeed, but I do think at some point within the next six months, we'll have a better idea. Would you not say that in 2008, you did have an understanding of what was priced into the market specifically, that there was a lot that, that wasn't priced in? Oh, absolutely. I learned this because I remember when Bear Stearns is, um, they had like this fixed income fund that, blew up in May of 2007. And what that fund had done was invest in subprime paper. And I remember there was a sell side analyst who I was very friendly, who, um, he worked at a firm that was very heavily involved in subprime paper. He was a financial services analyst. And so he asked me what was going on. And I said, well, why don't you just get in the elevator, go down two floors and go talk to your own desk. And, and what I realized was that the reason that, that the equity people didn't know what was going on because it wasn't an equity story. It was a fixed income story. And unless you immersed yourself in the world of fixed income, there was no way you could figure out what was going on. That's not true here. You know, this, this is a tech story, um, which will, you know, I think everybody understands there's, there's massive concentration risk. I mean, I think even the people who are very bullish would, would, would say that. And, um, at the end of the day, I think the, the statement that it, it, at least for now, it depends on open AI and anthropic being successful, I think is true. Now, maybe it'll be successful and it'll all be okay. And then again, maybe not. I don't know yet. You've also talked about, uh, some of the off balance sheet debt issues, um, that are becoming more and more. It seems, uh, in AI world in data center world, could you speak a little bit to what we're seeing there in terms of debt issuance, um, what the risks might be and how systemic and important it is to the AI build out right now? Well, is this something like $500 billion worth of AI debt being raised this year? You know, how much of that is off balance sheet? I don't know yet. I don't think it's insignificant. I think the reason why they're doing some of these off balance sheet, uh, shenanigans is the best way I could put it is they're trying to preserve their credit ratings as much as possible. So if you can get it off balance sheet, it's like poof magic. It doesn't exist. Um, and you know, the rating aid ratings agencies won't count it. Um, I've seen this movie before. You've been in that movie before. I've been in that movie. So I'm kind of appalled. I mean, there was, there's a, um, Meta did a last year did a almost $30 billion deal where they're building a, um, data center in Louisiana and they created some, uh, off balance sheet vehicle where the all 30, basically all 30 billion of debt or something like that doesn't show up on their balance sheet. And if you go into Meta's 10 K, there's an entire, like three or four paragraphs where the auditor goes through a torture description. I mean, torture doesn't even begin to, to tell you what's going on here, but a torture description of this transaction and why it's off balance sheet. So in my rap for last week, I, I quoted the entire, all four paragraphs. I mean, it took me about three or four minutes to read the whole thing. And then I said to my viewers, um, let, let me translate. This into plain English to tell you what's really going on here. What the auditor is real is really saying is we really don't know if this thing should be off balance sheet or not. We probably think it shouldn't, but Meta told us that it's okay. We're really nervous about it, but Meta said, chill bro. And so we said, okay, we chilled. And that that's basically what the 10 K said. Um, you know, that's what happened in Enron. That's what happened in, uh, the, the sieves that the wall street created to get a lot of stuff off balance sheet. Um, like I said, I'd seen this drill before. I mean, presumably it doesn't end well. It seems that the problem, whenever something goes wrong, whenever there is a problem in the market, it's because there is a lack of accountability on anyone's part, whether it's the company's not taking accountability for their own, as you call it shenanigans or the auditors and the ratings agencies whose responsibility is to accurately assess what level of risk these companies are taking. And so I think that's, I think that's, I think that's taking on. And if it's your view that the auditors are saying, we don't really know, they told us it's fine. So it's fine. I guess the question is how large of an issue is that? I don't know how much is off balance sheet at this point. That's, that's my only caveat to it. Meaning you're, you're not ready to determine. I don't know the size of it yet. I'm trying to figure out, you know, of the 500 billion, how much of his, of it is off balance sheet and how much of it is on balance sheet. I don't know. I'm trying to figure out how much of it is on balance sheet. I don't know. I don't know yet. And depending on how large that number is, what will that mean for your analysis? I think what it would mean is that these companies are very, very nervous about their credit ratings and they're trying to do everything they can to preserve them. And if that means creating off balance sheet vehicles that really shouldn't be off balance sheet, but they get their auditors to agree that it's off balance sheet. So be it. That's what I think it means. We'll be right back after the break. And we have some exciting news. We have been nominated for three Signal Awards. So please go vote for us at vote.signalaward.com. Type in Prof G Markets in the search bar, and there you can vote. 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HIMSS.com slash markets. Individual results may vary, and stopping treatment may result in weight regain. Support for the show comes from BCX, the public ticker for privacy. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans could be a part of that journey through perhaps the greatest innovation of all, the U.S. stock market. It didn't matter whether you were a factory worker in Detroit or a farmer in Omaha, anyone could own a piece of the great American companies. But now, that's changed. Today, our most innovative companies are staying private rather than going public. The result is that everyday Americans are excluded from investing and getting left further behind while a select few reap all the benefits. Until now. Introducing VCX, the public ticker for private tech, now available wherever you buy stocks. 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What does a 10-year at 5% plus mean for everybody? Well, I think it's a good question. I think it's a good question. petition, which didn't exist before. So I think one of the reasons why the 10-year is as high as it is is because, like I said, there's a crowding out effect where AI debt is crowding out treasury, which is a crazy statement because nobody has crowded out treasury before, but now they are. And that's why, you know, Scott Besson tried to pull a rabbit out of the hat by trying to buy $6 billion worth of long-term treasuries in something called Operation Twist, where he would issue short-term debt to buy long-term treasuries, and it's failed miserably. So the treasury department has lost a lot of credibility because when he started, I think the 10-year was like at 4.75, and now it's at 5.21. Yeah, what do you make of his comments about that buyback program? Because his view is that yields were wrong. But the markets were incorrectly saying something about the sustainability of the U.S. economy that wasn't true, and he was trying to correct it back to the truth. Do you agree with him? What do you make of his comments? I think it's a weird argument. I mean, I, the treasury markets are pretty efficient. They're more than pretty efficient. They're really efficient. So to say that they're wrong? What are they wrong about? I mean, there's a war going on. The oil prices are higher, you know. Diesel fuel is at an all-time high. I mean, what exactly is he, I don't know what he's talking about, because I, what is he saying? That inflation is about to come down? Well, if inflation is about to come down, then treasury yields will come back down when that happens. I mean, I don't get the argument. I really don't. Just in terms of this AI bubble story, which has been around for a very long time at this point. Let's not get carried away. It's been around for six months, which in our world feels like an eternity. But in the scheme of human history, it's pretty short. I would put it to beyond six months. I would say maybe like a year ago was when people started to- So it's a year. But like I said, it's not, you know, history is long. A one-year story, like I said, you know, because we're, you and I are immersed in the markets every single day. A one-year story feels like an eternity. But, but it, but clearly it's not an eternity. But I do think that for a lot of people who are interested in the markets, I mean, now that we're on social media all the time, we're listening to podcasts, we're watching CNBC, I would imagine that for a lot of listeners, it feels like it's been a long time to them as well. In bubble cycle terms, it is, it is a blip. My question is, have you been surprised at all by the resiliency of this market? Despite these risks. And to be clear, none of the risks that we have been pointing out have been wrong. Everything, we've simply been stating facts that could lead to a correction. But we haven't really seen that. I'd be interested to get your views on whether this has surprised you, how resilient the market has been, or if this is sort of par for the course. Oh, it hasn't surprised me at all. I mean, I mean, the lesson I think that people have taken since- Since the dot-com crash is that nine times out of 10, the new, new thing becomes usually successful. Whether that's Amazon, or it's Google, or it's Meta, or, you know, you name it, whatever it is, nine times out of 10, it's a winner. And this is the new, new thing. And so everybody's just taking out the playbook and saying, this is Amazon circuit 2001, or, you know, pick your stock, and let's play ball. And by the way, I've played ball too. I've invested in these companies. I've taken some risk down. But my nervousness about the story is the incredible concentration. Now, maybe a year, two years from now, that will no longer be true. It'll be much more diversified, and it'll all be fine. And then maybe- And then again, maybe not. But I don't, I don't think anybody knows at this point. How have you reduced your risk of in, in the past year or so? What are you, what steps are you taking to protect yourself? Well, in the past month, I took four of my AI type stuff, and I just shored part of it against the box. Would you recommend that as a, as a hedging strategy? I am not recommending that to anyone. What I did say to my viewers was that this is an option that you can do, but that if you do it, you have to unwind it by the end of January, because otherwise the IRS will treat it as a sale. Yeah. What do you make of valuations overall at this point across the S&P? Because we have, the Shillate Cape is around 41, second highest reading ever. The only time it was higher was in late 99. I mean, the market on, on certain valuation metrics does seem quite expensive right now, but at the same time, earnings are exploding. AI does seem to be, you know, advancing quite significantly. And there is a possibility that it could be, as Trump says, the golden goose. What do you make of valuations across the market at this point? I don't. That's not my bugaboo. I think that narrative is a far more powerful force in valuation. So if the AI narrative continues, the stock market will go up. And if the AI narrative breaks, the stock market will have a huge correction. And what, and, and that it wouldn't matter what the valuations are, high or low, it would get crushed. So I think it's much more important to try and figure out what's going on fundamentally. And, and is the narrative going to change than to, than to sort of sit there on your high horse and say, I think the market's too expensive, so I'm not going to invest. What are some of the ways that you personally check in on and analyze the narrative? What kinds of things are you focused on? I'm trying to figure out what, what share open weight models are taking from the more expensive models. That's one big thing. And then I'm dying to see the S1 of Anthropics so I can figure out what the hell's going on. We'll be right back. And for even more markets content, sign up for our newsletter at ProfGMarkets.com. Support for this podcast and the following message is brought to you by E-Trade from Morgan Stanley. Simplify your finances and discover the convenience of investing and banking all in one place with E-Trade from Morgan Stanley. Choose from a wide range of investment choices and award-winning banking solutions together in one platform. Plus get up to $1,500 when you open a brokerage account. With a qualifying deposit today. Learn more at E-Trade.com slash offer. Banking products and services are provided by Morgan Stanley Private Bank, National Association, member FDIC. Terms and other fees apply. Investing involves risks. Morgan Stanley, Smith Barney, LLC, member SIPC. In perimenopause and menopause, it's a separate issue. For a lot of women, it's a separate issue. Midi can help. Visit joinmidi.com with code VOX right now to book your first visit today. Joinmidi.com, code VOX. This episode is brought to you by Palmolive. Family time isn't just the big moments. It's weeknight dinners. Sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palmolive Ultra. Palmolive's most powerful formula removes up to 99.9% of grease, leaving your dishes sparkling clean. And the new convenient pump makes cleaning even easier. So you can spend less time tackling dishes and more time together. Shop now at palmolive.com. We're back with Profiteer Markets. As we enter the fourth quarter here, do you have any predictions for what we might see? And also, what are your reflections on 2026? Looking back over the past three quarters, what have been your biggest takeaways? My biggest takeaway is that the market's been unbelievably resilient, despite everything that's been thrown at it. There's been a war. There's more inflation. But U.S. growth is still quite strong. So the market's been very resilient. It really needs to be respected. You know, what will happen in the fourth quarter? I have no idea. Right now, it's a very weird time in that the only two variables that matter are oil prices and interest rates. So, you know, the AI narrative is very important. But right now, it's not as important. What's much more important is the oil prices and interest rates. If the war were to ever end, What's much more important is the oil prices and interest rates. If the war were to ever end, i think we would get back to some sort of more normal narrative is there anything that investors can do or can are there anything that we can act on as it relates to oil prices and interest rates like it's one of those things that it's it's so funny because you know the job of the investor is to kind of look at stocks and look at earnings and then suddenly everyone's asked to be a geopolitical analyst because as you point out it really matters but we're not geopolitical analysts so i feel like there's a question for investors right now which is like what are you even supposed to do about any of this i think you're supposed to do nothing because i mean if you went out on a limb and did something that would do well if oil prices went up a lot just let's just say the war could end tomorrow so you'd be screwed and vice versa you so i don't think anybody can predict this at all so better to just uh hang tight and uh you know if you want to reduce some risk reduce some risk but otherwise i wouldn't do anything so what is your strategy look like these days i i know that you are short one company i'd be interested to to hear more about that i heard that on cnbc yes well it happened something happened today um yeah tell us a little bit about how you're investing right now i mean look i'm i have some shorts i'm mostly long i took down some risk because i think like everybody else i'm kind of nervous about the whole ai narrative but i'm i am not willing to make some major call that you know the whole ai story is going to implode um i'm just not willing to do that i don't think i i mean it may but i think making that call is premature could you tell us about your your fico short that's what i heard about in cnbc so fico for those of viewers who don't know is a company where let's say you wanted to get a mortgage um the lender basically calls fico on the phone and says hey what's this person's credit score and fico has a credit score for steve eisman and elson has a credit score for basically every single person in the united states of america and depending upon what your fico score is you'll either get a mortgage or you won't get a mortgage and and that's basically the mortgage system and fico has had a monopoly on this forever well like as long basically as long as it has existed and the company got very very greedy you know they in the in the past they didn't charge that much for the service and over the past five years they raised prices get this one thousand six hundred percent i'll say that again they raised prices one thousand six hundred percent that's a lot of percent yeah and i think they angered the entire mortgage ecosystem including bill pulte who's the regulator of fannie mae and freddie mack and one of the great lessons in life that i have learned over the years is don't piss off your regulator because it's just it's really dumb and so bill pulte has create has helped create an alternative score called vantage score and the announcement yet last night which he did on x i love this guy he puts out major announcements about the industry on on x um to make a long story short gives an advantage to vantage score over fico in terms of scoring so you know right now vantage score probably has a market share of around eight percent and it's possible within a few months it could have 50 because this morning rocket mortgage which is probably the largest mortgage originated in the united states announced that they were just going to use vantage score from now on wow so the stock's down i think almost 20 percent was down to almost 20 percent before the market opened um i mean basically what's the short thesis is you had a monopoly and you're not going to have a monopoly how do you identify uh short positions like fico as an example um how did you discover that and at what point do you decide to actually take that short position which is relevant because as you point out you're not taking a big short position on this ai trade to you it's we're not there yet it's not it doesn't it doesn't warrant it i mean what's nice about the fico short is that it's not economically dependent it's not ai dependent it's it lives in its own universe that literally has nothing to do with anything else in the whole world um what put me on to it was just um many many months ago pulte got on x and said something really obnoxious about fico i said to myself you know i've seen this you know once in a blue moon a financial services company really anchors their regulator and the and the net result is never good what he's going to do i don't know but you know then over time it became clear that he was looking he was he wanted an alternative to fico and he was going to make sure there was one you are generally long um this market would be the right way to describe your position just not as long do you think that that is a a popular strategy at this point i have absolutely no idea i just know i sleep fine to what extent does sleeping fine uh play a role in your investment strategy at this point oh it's huge it's absolutely huge when when i don't sleep hey i start to go crazy and so i i need to do something to be you need to sleep you need to you need to be comfortable with your positions you can't you can't walk around all the time all day in a panic um i think that's true for everybody and you know if the result is to sell something or take down some risk or short something just to make yourself feel more comfortable yes that's what you should do how did you sleep in 2008 i generally sleep fine um i i i it wasn't the sleep that was my issue my issue was i literally i literally thought planet earth was going to burn i i i swear to god i i would we people would come to my office and i would tell them what would happen was going to happen and they would leave in tears i mean it was just i i was that freaked out by how bad i thought things were and the thing that freaked me out the most and and freaked out my partners as well is you know in 2008 we all said to each other surely the government knows what we know and if they know what we know they're going to do something and it turned out we were wrong the government did not know what we knew they had no idea they were completely ignorant and that's why it got as bad as it got but it seems significant you don't feel that we're at that moment yet no i don't is there anything that you would you would expect to see if we were to get to that moment like i said you need to focus on anthropic and open ai if anything bad happens to one of those two companies within the next year you know if it's five years from now the business will be much more diversified but within the next year given the concentration levels you know again something like 70 of ai hyperscaler revenue comes purely from anthropic and open ai that's incredible concentration risk so if one of these two companies gets into trouble everybody's in trouble could you see them developing some sort of too big to fail positioning where they're not going to be able to do anything about it the government says they can't fail i certainly hope not i really don't want to go down this road again do you think that it could though i mean if the whole system is dependent on these two companies not going under the whole system is not dependent upon these two companies however if i'm just i'm not saying this is going to happen let's just say tomorrow when anthropic went bankrupt i think the u.s economy would probably either be in or very close to a recession very quickly that is not though systemic risk that's just a recession you know we'll be fine it may take a year or two to get out of it but it's not the end of the world jp morgan going down that's the end of the world you know people not being able to get their money out of the bank that's the end of the world you know anthropic or open ai going down is painful don't get me wrong but it's not the end of the world anthropic will go public people are saying around two trillion dollars is the expectation it would make it one of the largest most valuable companies in the world uh what do you make of that valuation would you be have any interest in investing zero i mean it's like spacex you know i had no interest in spacex although i did find it amusing that's been spacex that one of the things that spacex wanted to do was um asteroid mining which i i was very i was very happy about that because you know there's a wonderful show on apple called for all mankind which i recommend very heavily um where asteroid mining actually plays a major theme and so i thought maybe maybe elon was watching the show and just tried to shove that into the s1 i think that's probably right i think that's how he comes up with it yeah it's a it's a fun story you just find a giant pile of gold on some rock flying across the sky well look he's he's totally into sci-fi that's the you know i don't know if you know the origin of of grok the word grok i don't oh i'll tell you so um you know so grok is his ai company within spacex so the word grok the origin of it was in the early 60s. It was a novel written by Robert Heinlein, who was a very famous sci-fi author, called Stranger in a Strange Land. And Stranger in a Strange Land was about a young man from Mars, human, who comes back down to Earth and is kind of like a messianic figure. I read this in the 70s when I was in high school, by the way. And grok in the novel basically means like some very, very, very deep understanding. That's the origin of the word. Heinlein made up the word himself and Elon took the word and called his AI company after grok. I think we're going to need to figure out some sort of commission fee for all these sci-fi authors because they seem to be the real. They're all dead. Yeah, right. That's why it works out. Well, Steve, we always appreciate your time. Just final question. Is there any advice that you would give to anyone who's thinking about all of this heading into. The final quarter of 2026, anything you think that our listeners should be thinking about or paying attention to? I would just keep paying attention to the AI narrative and see which way it's going to go. I mean, the problem with the market outside of interest rates and oil, you know, if we went wherever we go back to a normal market is it's basically all one trade. You know, the only sectors that are not AI-ish, for lack of a better word, I think. I think would be staples and healthcare, which, you know, combined is something like 14% of the S&P. So the remaining 86% of the S&P, to one degree or another, is AI-ish. So that's the only narrative that matters. Steve Eisman is an investment analyst and portfolio manager with decades of experience in financial markets. He is best known for his pivotal role in predicting and profiting from the 2008 subprime mortgage crisis chronicled in The Big Short. Steve founded and managed the Emery's Partners, a long-short equity fund focused on fundamental analysis. In 2014, he joined Neuberger Berman as managing director and portfolio manager. Now, Steve is the host of The Real Eisman Playbook, a weekly financial podcast. Steve, really appreciate your time. Have a good day. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Carti. Our research team is Dan Chalon, Kristen O'Donoghue, and Mia Silverio. Jake McPherson is our social. producer, Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and join us for a fresh take on the markets on Monday. We'll see you in the next episode of Prof G Markets. In parallel, we're not alone. Perimenopause and menopause, they're often the same hormonal story. Midi can help. At Zoc.com, you can find us on Facebook, Twitter, and Instagram. If you'd like to learn more about our We know you care about your health. You wouldn't do that early morning cardio if you didn't. 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