Hello, Shivam Raj, and welcome to the Grammar Exchange.
Even if in speech sentence (1) is heard a lot, in written language only (2) is strictly correct. The rule for this can be read in the item from The Gregg Reference Manual transcribed below:
Since what follows "as" is the subject (heis dumb), only "he" is grammatically correct. The accusative form of the pronoun (him) should be reserved (in written English) for those cases in which it is the object, for example:
3) I find them as dumb as him (I find them as dumb as I find him dumb).
4) I find them as dumb as he (does) (I find them as dumb as he finds them dumb).
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