'Big Short' investor Michael Burry says there is 'no way to time or predict' when the AI bubble will burst

Michael Burry, the renowned investor known for his role in 'The Big Short,' recently shared insights on the status of the AI market in a new Substack post. He cautioned followers against expecting any definitive predictions regarding when the current AI bubble might burst, emphasizing that it is challenging to time such events accurately. Burry explained that the dynamics of market shorts typically favor short-term strategies, suggesting that they rarely extend beyond a few years. He noted, "Shorts are almost always short-term trades. Usually less than a year, maybe a couple years at most," indicating that the current landscape might still have potential for growth. The investor elaborated on the concept of "supply-side gluttony" in the industry, pointing to significant investments in data centers and GPU orders that lack corresponding end-user demand. He argued that this misconception is leading investors to misinterpret these developments as positive supply-chain activity. Burry attributed much of the market excitement to the marketing efforts of Nvidia's CEO, Jensen Huang. He further stated that when the market does peak, the reasons behind it may not be immediately clear. "Even if the reason is an AI buildout bubble popping, that will likely not be apparent until a year or two later," he added. Burry advised caution, stating that it is generally unwise to short stocks or purchase puts, especially on those perceived as overvalued, due to their tendency to maintain upward momentum. Nvidia has not publicly responded to Burry's critiques. His recent posts have sparked discussions, particularly after he compared Nvidia to Cisco, a tech company that experienced a significant stock drop during the dot-com bubble. In response to concerns over the AI market, Jensen Huang, during Nvidia's earnings call, expressed confidence in their position within the AI sector, stating, "From our vantage point, we see something very different."