Power Players

How Mark Cuban invests in stocks: How good a company is at AI is the 'foundation'

Mark Cuban on ABC's "Shark Tank"
Jessica Brooks

Billionaire investor Mark Cuban has been bullish on the future of artificial intelligence for years, and he makes it a priority to learn about and invest in AI.

In fact, Cuban asks himself "How good is the company at AI?" before investing, he tweeted on Saturday.

"It's the foundation of how I invest in stocks these days. The companies that have harnessed AI the best are the companies dominating."

In the thread, Cuban — referring to a chart that purports to show the growth of the companies — called Alphabet, Apple, Amazon, Facebook and Microsoft "the 'AI Squad.'" "...They keep getting smarter while everyone else stays the same,'" he tweeted.

To assess what Cuban calls "AI dominance," he looks at how a company uses AI to "optimize" things like pricing, manufacturing and customer service, which "may not be obvious in a product or service," he tweeted. "These lead to better cash flows. It's a new paradigm in organizing companies but it's INCREDIBLY HARD to do right."

After all, it's important to "be informed" before investing in any stock, he tweeted.

Cuban has consistently recommended other entrepreneurs pay attention to AI as well.

"If you don't know AI, you're the equivalent of somebody in 1999 saying, 'I'm sure this internet thing will be OK, but I don't give a s---,'" he said at the 2020 CES conference. "If you want to be relevant in business, you have to or you will be a dinosaur very quickly."

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

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"It scares the s*** out of me," billionaire Mark Cuban says of AI
"It scares the s*** out of me," billionaire Mark Cuban says of AI