Key Takeaways
- Legendary investor Michael Burry has taken short positions against multiple AI-related stocks, including Tesla, Applied Materials, Caterpillar, and a major semiconductor ETF
- Burry described Samsung and SK Hynix’s ambitious $500 billion chip manufacturing project as “the beginning of the end”
- A separate short bet on Micron was justified by the stock’s cyclical patterns and rally to what Burry termed “historically extreme” valuations
- The investor shared comparative charts linking the AI surge to previous market collapses, including the dot-com bust and 2008 financial crisis
- Major technology corporations are projected to invest approximately $700 billion in AI-related infrastructure throughout this year
The investor who gained worldwide recognition for his successful bet against the housing market—documented in “The Big Short”—is now targeting artificial intelligence stocks with bearish positions.
Toward the end of June, Michael Burry disclosed that he had established short positions targeting Applied Materials, Tesla, Caterpillar, and the iShares Semiconductor ETF. According to The Wall Street Journal, these revelations came through his Substack publication titled “Cassandra Unchained.”
The semiconductor exchange-traded fund represents a comprehensive wager against the artificial intelligence sector. Among its largest positions are Advanced Micro Devices, Micron, and Nvidia. This particular fund has experienced gains exceeding 130% during the previous twelve months.
In addition to the ETF position, Burry established a targeted short against Micron. His reasoning centered on the company’s historical boom-and-bust patterns and valuations he characterized as reaching “historically extreme” territory.
Part of Burry’s skepticism stemmed from announcements that South Korean tech giants Samsung and SK Hynix intend to commit $500 billion toward constructing a massive chip manufacturing hub. While that news initially propelled technology stocks upward, Burry wrote on his Substack that it marked “the beginning of the end.”
This isn’t Burry’s inaugural skeptical stance toward AI investments. During the previous year, he initiated bearish trades against Nvidia and Palantir Technologies, both prominent winners from the AI investment wave.
Burry’s Historical Comparisons to Previous Speculative Manias
Through his social media channels, Burry shared multiple analytical charts highlighting similarities between today’s AI enthusiasm and earlier speculative frenzies.
One visualization illustrated the global machine learning sector expanding from less than $1 billion in 2011 to approaching $90 billion by 2025. His accompanying caption dripped with sarcasm, ridiculing the notion that AI equities can only appreciate indefinitely.
Another chart displayed U.S. residential real estate valuations preceding the 2008 financial meltdown. Yet another documented internet adoption rates throughout the 1990s prior to the dot-com implosion.
While Burry stopped short of explicitly labeling AI a bubble, he implied that market participants frequently extrapolate genuine long-term technological advances into asset valuations that exceed what underlying economics justify.
Industry analysts anticipate that technology corporations will allocate nearly $700 billion toward AI-related infrastructure during 2025 alone. Burry joins a growing chorus of skeptics questioning whether potential revenue streams warrant such massive capital deployment.
Despite the warnings, not every AI-related investment has disappointed. Micron shares surged 300% during the year’s first six months. Sandisk experienced an even more dramatic climb of over 800% across the identical timeframe.
Burry demonstrated prescience with his pre-2008 housing market short positions. While ultimately vindicated, the timing challenge remains formidable even for sophisticated market participants.
His current bearish trades signal his conviction that the ongoing AI rally has extended beyond sustainable levels, following recognizable patterns from previous speculative episodes he has studied.
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