Concentration risk

Plain English. Too much of the AI economy flowing through too few counterparties: one foundry, one GPU vendor, two or three clouds, a handful of labs — and, inside each, revenue dominated by a handful of customers. Failures that look independent are not, because everyone's exposure resolves to the same short list of balance sheets.

Why it moves money. Diversification across AI stocks is partly an illusion — an index of chipmakers, clouds and labs can be one customer's capex decision wearing many tickers. Circular financing (vendors investing in customers who buy from vendors) amplifies the correlation, and concentration means the aggregate numbers stay strong until they fail all at once: the most reliable revenue series would be the last place weakness shows and the sharpest place it lands.

What to watch. Customer-concentration disclosures in filings, which are drier and more honest than keynotes — the reported share of a supplier's revenue attributable to its top few buyers, and whether that share is rising.

From the signals. Nvidia's hyperscaler concentration met its earnings test. Microsoft's filings say roughly 70% of its AI revenue is OpenAI. Steve Eisman sees the boom resting on two companies.