CNBC’s Jim Cramer said Thursday that OpenAI reminds him of the kind of speculation and leveraged, aggressive bets that caused the 1990s dot-com bubble to burst. “OpenAI is 2000 in a nutshell,” Cramer said on “Squawk on the Street,” comparing the current everything-AI-mentality to the everything-internet that got the market in trouble roughly 25 years ago. The Nasdaq seemed unstoppable in the late 1990s, reaching all-time highs in March 2000. When it all came apart, the tech-heavy index lost nearly 80% over roughly 2½ years, bottoming in October 2022. The Nasdaq took about 15 years to return to record highs. There have been endless comparisons to that dark time and predictions that history might be about to repeat itself. “The Big Short” investor Michael Burry recently said the AI-driven market may fall before companies’ spending on the technology does. Cramer, who is not calling for a dot-com-style crash, has been increasingly worried about what OpenAI means for the current market, as much of the artificial intelligence trade depends on the company’s success. “They may be reckless,” the “Mad Money” host said, leaving open the question of whether OpenAI’s big swings with “other people’s money” will work out. In his Nov. 16 Sunday column for CNBC Investing Club members, Cramer predicted the “Year of Magical Investing” will come to an end, putting OpenAI at the center of what was a two-pronged market selloff last month: “One involved the spike in the price of Oracle debt insurance and the ill-advised “backstop” comments made by OpenAI CFO Sarah Friar. The other? The endless apotheosis of nuclear alternatives to natural gas, quantum alternatives to graphics processing units – or GPUs, the artificial intelligence gold standard – and all sorts of one-offs involving self-driving adjacencies and, most egregious, all sorts of entities that look like data center buildout but have much more to do with ingenious, levered bitcoin scams that by any other name other than 21st century regulation.” The Nasdaq has bounced off its late-November lows and is roughly 2% off its all-time highs set in late October.
