Finshots Daily Why Michael Burry is going short on AI
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Nov 27, 2025 Michael Burry, renowned for his market predictions, is taking a contrarian stance against the AI boom. He’s shutting down his hedge fund and launching a Substack newsletter to share his insights. Burry critiques the massive investments in AI infrastructure, citing risks of depreciating hardware and uncertain returns. While everyone seems bullish on AI, he focuses on the inflated tech valuations instead. The discussion highlights two potential outcomes: either AI justifies its high prices, or Burry’s strategy pays off in the long run.
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From Hedge Fund To Newsletter
- Michael Burry closed Scion Asset Management and deregistered the hedge fund on November 10, 2025.
- He then launched a newsletter called Cassandra Unchained to share views without regulatory disclosure constraints.
AI Boom As Supply-Side Gluttony
- Burry calls the current AI boom a potential bubble similar to the dot-com crash and warns of 'supply-side gluttony.'
- He argues heavy spending on expensive AI hardware chases unproven economics and may overstate future returns.
Depreciation Stretch Could Mask Losses
- Companies may be overstating profits by stretching GPU and server useful lives, understating depreciation.
- Burry estimates this accounting choice could overstate profits by about $176 billion between 2026 and 2028.