Tempus AI, Inc
The Tempest Surrounding Tempus AI
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Research Overview

INDEX:
S&P 500
Sector:
Technology
Position:
Short
Date:
May 28, 2025

After conducting a forensic financial review of Tempus AI, Inc. (Nasdaq: TEM) (“Tempus" or the "Company") a healthcare technology company that provides AI-enabled precision medicine solutions, Spruce Point believes that the Company is run by leaders who have a dubious history, is participating in aggressive and suspicious accounting practices, and relies on weakening partnerships. Furthermore, we believe that owning shares of Tempus is a poor risk / reward based on a flawed equity growth story, owing its appeal to the AI hype despite only 2% of revenue stemming from AI applications. Based on our investigation, we estimate a 50% - 60% potential long-term downside and market underperformance risk.

The report highlights several key concerns with the Company, including:

  • Tempus Founder Eric Lefkofsky and his associates have a history of promoting disruptive technology companies, cashing out early, and leaving public shareholders with losses or lackluster returns.
  • Multiple Board members and other executives have been associated with troubled companies that restated financial results.
  • Evidence shows signs of aggressive accounting and financial reporting, including a joint venture between Japan’s SoftBank and Tempus that appears to involve round-tripping capital to create revenue and income for Tempus.
  • Notable partnerships and deal announcement with AstraZeneca and Pathos AI merit scrutiny, as they appear to be weakening and ultimately signal pressures to the Company.
  • Recent revisions to the Company’s financial guidance reveal weakness in core operations, especially in the core genomics and data businesses.

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