Prominent short-seller Michael Burry predicts market downturn for AI companies
Noted short-seller Michael Burry believes a market crash preventing AI firms like OpenAI and Anthropic from listing would benefit humanity. He forecasts a significant AI sector decline.
Michael Burry, the investor famous for predicting the 2008 financial crisis, has stated that a significant market downturn, one severe enough to prevent major artificial intelligence companies like OpenAI and Anthropic from going public, would be beneficial for humanity.
Burry elaborated that these companies could absorb trillions of dollars that would ultimately be "destroyed," which he considers the least damaging outcome. He previously responded to a user's comment about crashing the market to stop "Skynet" (the AI from the Terminator films) by saying, "Pretty much." OpenAI CEO Sam Altman has himself suggested that a 2026 IPO might not be wise due to AI safety concerns.
Developing advanced AI models and the necessary computing infrastructure requires substantial capital. A public listing would provide access to larger pools of funding. Anthropic, a competitor, is reportedly planning to list after the U.S. midterm elections in November, according to a prospectus seen by Reuters.
Burry recently updated his timeline, expressing increased conviction that his bearish outlook on AI will materialize within the next year, a shift from his previous forecast of 2028. He has adjusted his short positions across various targets, including Nvidia, Palantir, Micron Technology, Oracle, and the Nasdaq 100 index.
He argues that debt-fueled investments in chips and data centers are unsustainable and vulnerable to rising interest rates, which could lead to a systemic collapse. Despite these warnings, investors have largely continued to drive AI-related stocks to record highs this year.