Breaking news, and how the end might begin
Marcus on AI
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Breaking news, and how the end might begin<br>A flashback to my most recent interview with Steve Eisman, and some potentially critical news
Gary Marcus<br>Jun 10, 2026
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Part I: Flashback
A couple weeks ago, Steve Eisman, who predicted the subprime mess (Steve Carrell played him in The Big Short), interviewed me, and asked me how the AI boom might all fall apart.
For reasons I am about to explain, that interview, recorded May 22, now seems supremely relevant.<br>Here are two snippets. (Some parts of Snippet 1 are currently paywalled in a separate video but may come out soon for free; I will update with a link if they do.)<br>After that, I will explain why all this seems super relevant today.<br>Snippet 1: Stumbles from OpenAI could precipitate a tidal wave
Eisman: Assuming it’s a bubble. I mean if it’s not if if we’re wrong and it’s then and it’s not a bubble and and … they’ll they’ll be able to charge for the tokens and it’ll all become profitable and it’ll be and that’ll be clear within a year or so, then …<br>Marcus: Yeah. I mean I like to think of [the giant GenAI investments[ as it’s a bet. I think it’s a low probability of the bet coming through, but it’s not zero. It’s not<br>Eisman: Zero. But if it’s going to break, like in, you know, what what broke Subprime? What broke Subprime was the credit quality got so bad that the end user, the investor, stopped buying the paper. And that was the end. Because if the end user, the investor stopped buying the paper, the whole machine stopped dead in its tracks. The question I ask for you is: I mean, I wonder if maybe what will break it if it breaks is that the industry moves to this token pricing and people say, Screw you. I don’t wanna I don’t I don’t wanna pay.<br>Marcus: So that could certainly happen.<br>Eisman: And if or and if maybe that what what else do you think could happen?<br>Marcus: Well, so in a version of yours, and then I’ll give one of my own, what think might happen is that at some point one of these companies can’t really afford to keep losing money. Right? They’ll run out of VC money, they tap the public markets as much as they can.<br>My best candidate for this is open AI. Open AI, I think, has a problem right now. They are burning money the fastest. Okay.<br>Eisman: Which is what?<br>Marcus: They do not have the deep pockets that Google does. Right. They had a lead but they squandered it.<br>Eisman: Google got caught up and passed them.<br>Marcus: And then Anthropic did. I mean, maybe now they’re all kind of in a tie, but think about it compared to a few years ago. You know, everybody thought (not me, but almost everybody) thought that OpenAI was amazing. Sam Altman could do no wrong. Right. Now nobody trusts Sam Altman, there was the New Yorker story, there was the testimony in the Elon Musk trial. It’s pretty clear he should not be trusted. So I’m a company thinking you know, hypothetically, thinking about buying these services.And my choices are OpenAI, Anthropic, Google, maybe Amazon. I might not go to OpenAI anymore. And you know, th that’s reflected in the choices people are actually making, right? Anthropic has taken a lot of the business market and OpenAI has lost a lot of it. Google is fighting hard for that. So there’s a scenario. I tend to think that OpenAI is the one that goes down first . They’re also spending most money with least assets. they’ve made the most commitments. At some point they might not be able to pay their bills . Now, what they have done is they’ve kept raising the valuation. They’re starting, as your listeners might actually understand, to do weird things on preferred shares and contingencies on that funding, like some of the Amazon funding is contingent either on achieving AGI or IPOing, et cetera, et cetera. So they’re they’re making more and more concessions to the investors. They’re I saw one report that they’re offering private equity sa guaranteed seventeen point five percent returns. Which reminds me of Madoff and, you know. somebody else said maybe that’s like a first in kind of money thing, but there’s something that Reuters reported around this. You know, none of the paper is public, so we don’t know exactly. But you know, it’s pretty clear that they’re making more and more concessions to investors. They’re more and more urgent. I mean, the the biggest news just in the last few hours is that they want to rush their IPO in front of Anthropic…. they’re clearly afraid of anthropic. I think you will [see] when the numbers are really fully out, then anthropic is more efficient. we don’t know exactly why that is, but they’re more efficient. they’re less leveraged out to the hilt. They’ve made fewer promises. And so if I had the prospectuses of the two, you know, independent of what I think about the companies anyway, I’m pretty sure if I was had to invest in one, I would do Anthropic and not OpenAI. And so at some point, I think OpenAI is gonna have a...