Famed short-seller Jim Chanos shares the area of the stock market AI investors should be pursuing instead of data centers

• Jim Chanos warns against investing in AI data centers.
• Nvidia's investments in CoreWeave raise concerns over profitability and growth, he said.
• Instead, the famed short-seller said investors should focus on companies building AI models.

Legendary short-seller Jim Chanos isn't optimistic about one big piece of the AI trade.

Jim Chanos, the investor who predicted the collapse of Enron and the president and founder of investment firm Kynikos Associates, recently said he thinks investors should seek exposure to AI through companies that build AI models rather than the data centers that power them.

The data center boom was among the dominant market trends of 2025, as tech companies rushed to build out the infrastructure needed to support their AI ambitions. But Chanos pointed to several concerning elements that he thinks illustrate why the growth isn't sustainable.

Chanos shared his take on the best way to play the AI boom following a major announcement from chip titan Nvidia, which confirmed a $2 billion investment in AI infrastructure company CoreWeave. Despite the stock's rally over the past year, some finance pros have raised concerns about CoreWeave's business and path to profitability.

The short-seller shared several of his thoughts on the current AI market in a series of posts on X regarding CoreWeave's ambitious AI demand projections. When a user said he had become addicted to coding with AI models and expressed a willingness to pay handsomely for them, Chanos responded by summarizing his AI investing thesis in two sentences.

"In that case you should own the companies that build the models, not the companies that build the data centers," he wrote. "The former are technology companies, the latter are REIT's."

In his view, data center companies may be viewed as tech firms, but economically, they're more like real estate investments.

Using CoreWeave as an example, Chanos questioned whether investors are focusing on actual fundamentals rather than simply buying into AI hype.

"Does anyone still bother to check these wildly bullish claims with, you know, their actual financial statements…?!" he asked. "Because [CoreWeave] based on its annualized 3Q results, would still be reporting losses USING 10-YR LIFE for its GPU depreciation!"

CoreWeave reported third-quarter earnings that exceeded Wall Street revenue estimates, but it also scaled back its guidance for the coming year and revealed temporary delays regarding a data center partner.

This isn't the first time Chanos has expressed skepticism about the data center boom. In a previous interview, he highlighted the problem he thinks could arise if companies start to scrutinize the return on investment from their massive capex spending.

"I'm starting to worry there's so much spending right now on the AI physical boom — the buildout of data centers, chips, and so on — that if anyone decides to pause and ask, 'What's our real economic return here?' it could be a big problem."