"Big Short" Investor Steve Eisman Warns: OpenAI Bankruptcy Could Cause a Recession
"Big Short" Investor Steve Eisman Warns: OpenAI Bankruptcy Could Cause a Recession
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Ben Gran, The Motley FoolWed, October 28, 2026 at 11:57 AM UTC
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On a recent podcast interview, Steve Eisman said that he believes the AI stock boom is vulnerable to concentration risk.
With so much investment connected to just two massive AI start-ups, failures at OpenAI could trigger a recession.
Even if an AI stock crash happens, Eisman doesn’t believe it would be as bad as 2008.
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Steve Eisman, one of the investors who got famous for shorting the U.S. housing market before the 2008 mortgage crisis, was recently interviewed on Ritholtz Wealth Management's The Compound and Friends podcast.
Eisman, whose story was among those told in the bestseller and movie The Big Short, warned that the U.S. stock market has become heavily concentrated in the artificial intelligence (AI) trade, and asserted that if one major AI start-up goes out of business, it could trigger a recession.
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Eisman is not warning about a repeat of 2008. He didn't say that he believes that any major AI companies are in immediate danger. But if you want to understand the possible risks that the AI stock boom poses to the stability of the whole S&P 500, he is worth listening to.
Where did the AI boom come from? Corporate investment
The AI sector's boom has been driven by hundreds of billions of dollars of capital investments by some of the biggest companies on Earth. Hyperscalers like Alphabet and Microsoft are spending hundreds of billions of dollars a year to build AI data centers, buy semiconductors from companies like Nvidia, and build AI models to power products like Microsoft Copilot and Google Gemini.
OpenAI and Anthropic, the developers of ChatGPT and Claude, respectively, are not publicly traded yet, although both companies are preparing for initial public offerings (IPOs). But these AI labs have become highly important to the U.S. stock market because so many major tech companies are buying from them, building with them, investing in them, and selling compute and cloud services to them.
The impact of these AI capital expenditures has spilled over into the rest of the U.S. economy. Construction companies, energy companies, utilities, and other industries have benefited from rising revenues and earnings as they've collected shares of that spending. According to a recent Goldman Sachs analysis, through September, the AI boom was responsible for nearly 50% of S&P 500 earnings per share (EPS) growth in 2026.
So what's the problem? What if the AI boom just keeps going for years to come?
Eisman warns: The AI sector has a "concentration problem"
Here's the biggest risk facing the stock market, based on what's going on with AI stocks right now: concentration risk. The S&P 500 index has become top-heavy, with tech stocks and just a few big companies driving much of the recent AI-related economic activity.
"The problem with the AI story is a concentration problem," Eisman said on The Compound and Friends. He pointed out that about 70% of Nvidia's accounts receivable comes from just five customers -- what happens if one of those customers goes away? He also noted that about 70% of the hyperscalers' AI revenue comes from just two companies: Anthropic and OpenAI.
What if one of those AI labs struggles or fails to live up to its investors' expectations? The entire structure of the AI stock boom could start to wobble. Eisman did not make any specific predictions about either Anthropic or OpenAI, nor did he forecast where he sees individual AI stocks going. But he made a thoughtful analysis of the risks. And he said -- although he's not predicting that this will happen -- "If OpenAI went bankrupt tomorrow... the U.S. economy would go into recession."
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Should you still invest in the S&P 500 with AI bubble risks?
The "AI bubble," if you want to call it that, might not burst. These major tech companies are betting heavily on a bright future powered by AI tools that could boost productivity and efficiency in ways that drive big economic gains for years to come. It might work.
But even if there is a slowdown in AI investment, or a big AI stock market crash, Eisman doesn't believe it will be as bad as the 2008 stock market crash. The risks we're seeing now in AI stocks are "not the same thing" as those seen in the 2008 global financial crisis, he said.
Over the past 10 years, the S&P 500, as reflected in the index-tracking Vanguard S&P 500 ETF (NYSEMKT: VOO), has delivered an average annual return of about 15.3%. Over the past five years, VOO has delivered annualized returns of about 13.8% -- and that period included a bad bear market in 2022.
These strong returns might not continue. But the S&P 500 has a long-term track record of resilience, despite the occasional crashes along the way. Over the long run, the S&P 500 tends to be a great investment even if you buy shares right before a bubble bursts.
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Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Goldman Sachs Group, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
Source: “AOL Money”
