AI’s Achilles’ Heel: Why Everything Hinges on Anthropic & OpenAI | The Weekly Wrap

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**Steve Eisman** (0:53)
In war news, President Trump announced that he would not resume bombing, but would instead rely on economic pressure. And this conflict is going to continue, I think, for quite some time. Despite all the doom and gloom out there, the market is back to all-time highs. There are, however, many commentators calling for a crash. Tension levels are running very high. The dependency of the hyperscalers on Anthropic and OpenAI is just huge and quite scary. Should Anthropic and OpenAI fail, the margins of the hyperscalers will compress and business will return to slower growth. The entire AI chain goes into reverse. This is the potential Achilles heel of AI. That is what I am watching most carefully.
Hi, this is Steve Eisman and welcome to another episode of The Weekly Wrap. This is for the week ending Friday, August 14th, but recorded Thursday night, August 13th. First, a couple of housekeeping announcements. We are taking a two-week break after this Monday interview, August 17th, with Jason Trennert and Chris Ferrone of Stratigus. The Wrap will also be on a two-week break and resume Friday, September 4th. Interviews resume on Monday, September 7th with a deep dive into property and casualty insurance with Ryan Tunis from Cantor. Note that Wednesday Premium episodes will continue without a break. Just want to flag that on Premium, I will be dropping a two-part master class called How to Analyze Banks After Labor Day. I do a deep dive into everything you need to know and understand about bank accounting and bank functionality. With banks playing an opaque role in private credit and the massive AI buildout, understanding the quarterly earnings announcements is critical. And this master class will give you the tools to find the message hidden in the numbers. A quick update on premium pricing on Substack. Starting Labor Day, September 7th, premium for new subscribers will cost $20 a month and $200 a year. However, all current subscribers, monthly and annual, are completely locked in at the existing price for as long as you stay subscribed. As a reminder, premium subscribers get all episodes ad free, master classes, weekly Wednesday deep dives, and more access. Subscribe now before Labor Day and lock in today's rate. And now for the Wrap. Since this is a slow week for earnings, it's a good time to give some thoughts on investing strategy and business strategy, the role of upstarts, and of course AI and why Bitcoin is no longer cool.
So on this week's Wrap, we will cover number one, the war in Iran, two, investing now on certain times require patience, not hysteria, three, AI check-in, four, timing is everything, five, a check-in on software, six, a few earnings reports, and seven, my thoughts on entrenched businesses versus upstarts and how they interact and why the winners win and the losers lose.
In war news, negotiations have broken down. However, President Trump announced that he would not resume bombing, but would instead rely on economic pressure. Now, last Wednesday, August 12th, on our premium substack service, we interviewed Stephen Cook of the Council of Foreign Relations, who is a Mideast expert. And after speaking to Stephen, I have to conclude that a strategy relying solely on economic pressure will have difficulty succeeding. The Iranian regime does not care if its people suffer. They care about the regime's survival. And this conflict is going to continue, I think, for quite some time. But as long as there is no bombing, the market will probably march higher. Since it's close to the end of summer, let's take a step back and discuss some things beyond the craziness of earnings season. Let's first pivot to investing in times of deep uncertainty and start with the market and the role of AI.