Mark Cuban said CEOs of large public companies face a tough dilemma when it comes to AI, and it’s becoming a lose-lose situation for them.
The former Shark Tank billionaire investor said in a Sunday X post that entrepreneurs are building AI-native companies to replace incumbents.
Meanwhile, incumbents face what he calls the “innovator’s AI dilemma.” So either dismantle your company and reinvent it as native AI, or do nothing.
In either case, Cuban said, investors won’t be happy. He said two types of shareholder lawsuits will tell us when AI will impact public companies. One type of lawsuit is against companies that choose to dissolve, and the other is against companies that do not reinvent themselves. In either case, the stock price would decline and lead to litigation, he said.
Cuban advised CEOs to ask AI models the best path forward for their companies to become an AI-native version.
“If asking a model a question doesn’t make sense to you, you’re doing something terrible,” he said.
This investor previously told X that there would be two types of companies. “Companies that are good at AI and everyone else.”
“And because AI is such a transformative tool, ‘everyone else’ will fail,” he added.
Cuban’s comments come as some publicly traded companies begin to reveal how they are reinventing themselves as “AI native.”
The CEO of Amplitude, a publicly traded San Francisco-based analytics company, told Business Insider in January that the company is undergoing an AI transformation in several stages.
CEO Spenser Skates said Amplitude has acquired five AI startups since October 2024, appointed one of their founders to a new AI leadership position, and purchased GitHub Copilot and Cursor licenses for their staff.