Mark Cuban Turned to Grok to Test Zohran Mamdani's City-Owned Grocery Plan for NYC— and He Got a Rough Verdict

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Billionaire investor Mark Cuban turned to AI chatbot Grok on Monday to test the economics behind New York City Mayor Zohran Mamdani’s proposal for city-owned grocery stores, asking whether the concept could break even after estimating store margins and operating costs.

Grocery Margins Leave Little Room For Discounts

In a post on X, Cuban asked Grok which grocery products generate gross margins of 70% or more that could support a 30% discount, before questioning how much sales a store operating on 15% margins would need to break even.

The chatbot responded, saying almost no grocery categories consistently generate gross margins of 70% or more, with even the highest-margin segments falling below that level.

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It also estimated that a focused assortment of higher-margin products could fit inside a 2,000- to 5,000-square-foot store.

Excluding labor and employee benefits, it forecasted annual operating costs at roughly $25 to $55 per square foot, including rent, utilities, maintenance, and insurance, with costs potentially higher in New York City.

Hey @grok which grocery SKUs have 70pct or more margins that could be discounted to 30 percent off ?

How many sq ft would be required to sell all of them ? What would it cost to operate that size store, before personnel and benefits ? https://t.co/lqiDDQYYRh

— Mark Cuban (@mcuban) August 3, 2026

Can a City-Owned Grocery Store Make Money?

The assessment extended beyond store economics to the track record of government-backed grocery stores in the U.S.

Grok in response to Cuban said city-owned grocery stores have rarely succeeded in the U.S., citing examples including Baldwin, Florida, Erie, Kansas, Kansas City’s subsidized Sun Fresh, and several Illinois-backed grocery stores, many of which either closed or shifted to private operators after sustained losses.

In conclusion, the chatbot said purely government-run grocery stores have historically struggled to remain financially viable without ongoing subsidies or private-sector management.

Proposal Draws Fresh Criticism From Tech Leaders

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Cuban had shared a post by All-In Podcast host Jason Calacanis on X, who criticized Mamdani’s proposal, arguing that grocery stores already operate on 1% to 2% profit margins and questioned the need for governments to subsidize the business.

Tesla Inc. and Space Exploration Technologies Corp. CEO Elon Musk also weighed in, saying AI and robots would eventually provide free goods and services, while calling Mamdani “a thief and a liar.”

Meanwhile, Rep. Ro Khanna (D-Calif.) defended Mamdani’s proposal, saying critics were blaming city-owned grocery stores instead of higher food prices driven by the Iran conflict and President Donald Trump’s tax policies.

Mamdani has proposed city-owned grocery stores across New York City’s five boroughs, with the city planning to issue requests for proposals to identify operators.

Image via Shutterstock

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Mark Cuban Turned to Grok to Test Zohran Mamdani’s City-Owned Grocery Plan for NYC— and He Got a Rough Verdict

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