Famed investor Michael Burry, known for his “Big Short” bet against the 2008 housing market, has issued a stark warning that the current AI boom is a speculative bubble mirroring the 2000 dot-com bust.
Michael Burry Compares Telecom Bust With AI Boom
The warning came via a series of social media posts just after his firm, Scion Asset Management, revealed over $1 billion in bearish put options against AI-centric stocks Nvidia Corp. (NASDAQ:NVDA) and Palantir Technologies Inc. (NASDAQ:PLTR).
In a cryptic post on X captioned “Move along,” Burry shared a highlighted page from a book. The text described the 2000 telecom bubble, noting an “extreme imbalance” where “less than 5 per cent of US telecoms capacity was in use” and “Thousands of miles of expensive fibre optic networks remained ‘unlit’ beneath the ground.”
The parallel Burry is drawing is clear: the massive, multi-billion-dollar capital expenditures on AI infrastructure, such as Nvidia GPUs and cloud data centers, are reminiscent of the “unlit” fiber-optic cables that led to a market collapse.
See Also: Michael Burry Is Super-Bearish On Palantir — With 5 Million Puts
AI CapEx Grows While Cloud Growth Plummets Amid Investment Circle Jerk
A separate post, sarcastically captioned, “These aren’t the charts you are looking for,” provided the data to back his thesis.
One chart showed U.S. tech capital expenditure growth surging to levels that are “Matching the Tech Bubble of 1999-2000.”
This was contrasted with another chart showing slowing year-over-year cloud growth for giants like Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), and Microsoft Corp. (NASDAQ:MSFT).
A third chart, titled “How Nvidia and OpenAI Fuel the AI Money Machine,” depicted a complex web of investments and partnerships between major tech players, suggesting a circular, self-fueling cycle rather than sustainable, fundamental demand.
Burry Sends A Cryptic Message On Bubbles
Just a few days before revealing these positions on Nov. 3, Burry also posted a cryptic message on bubbles, while sharing a still of Christian Bale—the actor who portrayed him in the film The Big Short—with a brief, on Oct. 31.
While the S&P 500, Dow Jones and Nasdaq 100 closed in a mixed manner on Monday, the futures were lower on Tuesday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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