‘Big Short’ Investor Warns AI Giants Lack Moats and Pricing Power

Steve Eisman, the investor who inspired “The Big Short” and a senior portfolio manager at Neuberger Berman, said generative AI developers face a potentially fatal lack of competitive moats and pricing power. With no cost for users to switch between chatbots, companies spending vast sums on development will struggle to secure long-term profitability. His assessment is prompting the market to scrutinize the true investment value of AI developers and hardware suppliers.

In mid-July 2026, Eisman singled out Oracle and warned that it faced severe customer-concentration risk. He said about half of the $638 billion in remaining performance obligations Oracle disclosed in June was tied to OpenAI, raising concern over the company’s excessively concentrated exposure. He therefore prefers to invest in “pick-and-shovel” suppliers such as Nvidia.