‘Big Short’ Michael Burry Says Infrastructure For AI Buildout Is ‘Crumbling’ — Sees 2006-Style Setup And Wants More Leverage

• Burry says credit-market stress is emerging beneath continued AI optimism.
• Hyperscalers are committing hundreds of billions of dollars to AI infrastructure and financing.
• “The Big Short” investor has shifted several bearish bets from outright shorts to long-dated put options.

“The Big Short” investor Michael Burry is escalating his warning on the AI boom, saying the market is beginning to resemble the conditions that preceded the 2008 financial crisis.

In a chat on his Substack on Thursday, Burry said, “The infrastructure for AI buildout is crumbling. CDS prices are moving out, loans and bonds are falling or not trading.”

He added that equity investors were largely ignoring the deterioration in credit markets.

“It is creating a 2006, a whole year where everyone that wants to get in will have the opportunity to do so,” Burry wrote, referring to the period before the housing-market collapse, when optimism remained widespread even as stresses built up beneath the surface.

“I want more leverage now because things are coming apart quietly on the credit side,” Burry said in a follow-on comment, indicating he intends to increase his bets on a downturn that he believes could arrive sooner than expected.

AI Boom Runs On A Massive Infrastructure Bet

Burry’s warning comes as the AI investment cycle continues to drive enormous spending on GPUs, data centers, power and networking infrastructure.

Microsoft, Alphabet, Amazon, Meta Platforms and Oracle are collectively expected to spend more than $700 billion on capital expenditures this year and about $1 trillion in 2027.

The spending has also increasingly moved toward debt and other financing structures. Oracle, for example, said in June that it expected to raise nearly $40 billion through debt and equity financing in 2027 as it expands its AI infrastructure.  

That spending has powered a broader AI stock rally, particularly among chipmakers, memory companies and data-center operators.

Burry has argued that the problem is what happens if that spending slows. In a recent Substack post, he pointed to billions of dollars in purchase commitments, future leases and guarantees backing third-party debt across the hyperscaler ecosystem.  

Burry Replaces AI Shorts With Puts

Burry has been a vocal skeptic of the broader AI trade, repeatedly warning that surging AI spending and lofty valuations resemble a “bubble.” He has questioned the sustainability of massive AI infrastructure investments, raised concerns about companies aggressively spending on Nvidia GPUs and criticized the market’s enthusiasm for AI-driven growth.

More recently, Burry closed his outright short positions in Nvidia, Palantir, Micron, Nebius and other AI-linked stocks, replacing many of them with put options extending into 2027. 

He said new research prompted him to move his bearish timelines forward, with the “majority” of the repositioning driven by his view that the AI bubble could burst “sooner than later.”

On Stocktwits, the retail sentiment was ‘bearish’ for ORCL and AMZN, ‘bullish’ for GOOGL, and ‘neutral’ for NVDA, META and MSFT.

For updates and corrections, email newsroom[at]stocktwits[dot]com.