Why Michael Burry Is Doubting the AI Boom

Michael Burry, the investor who predicted the 2008 financial crisis, is warning about the AI market. He thinks it's too hyped up and might crash. Burry, who famously bet against the housing bubble, shared his thoughts on X after a two-year break. He posted a quote from the movie "WarGames, " saying that sometimes the best move is not to play. This shows he thinks the market is risky. Burry has changed his profile to "Cassandra Unchained, " referencing a Greek myth about a prophet who was never believed. He also used a "Star Wars" meme to say he's against the AI trend. He shared charts showing that cloud computing growth is slowing down and that tech companies are spending a lot on AI. He thinks this could lead to a crash, like the dot-com bubble. Burry's investment firm, Scion Asset Management, has bet against Nvidia and Palantir. He bought put options on these companies, worth over $1 billion. Nvidia and Palantir's stocks dropped after this news. Some people agree with Burry, but others think the AI boom will keep going. Burry's bets could pay off if the AI market crashes. But if the market keeps growing, he could lose big. The Federal Reserve's interest rate cuts might also affect the market. Burry's warnings are making people think twice about investing in AI.