'Big Short' Michael Burry says the bulletproof AI narrative reminds him of the dot-com and housing bubbles
Michael Burry from "The Big Short" has some concerns.
Bloomberg/Getty Images The AI boom is echoing the Internet and housing bubbles, Michael Burry says.
He recalled the same kind of unshakable optimism before the dot-com crash and financial crisis.
Burry said the AI boom poses a far greater threat to investors and the economy than Enron did.
Michael Burry says the seemingly unassailable positivity around AI reminds him of the dot-com and housing bubbles — and warns the mania could have far more devastating consequences than Enron's collapse.
A subscriber to Burry's Substack told him in a chat thread this week that it felt like "we are witnessing a massive coordinated effort to prop up the narrative." Burry replied: "That is how it felt in May of 2007 when the Fed Chair was saying there would be no contagion or a couple years earlier when he said there is no such thing as a housing bubble." "Or in 1Q2000 when every tech was showing crazy strong revenue growth selling to each other without the demand to back it up," he added.
Burry drew parallels to past bubbles on his Substack.
Substack/Cassandra Unchained Ben Bernanke, the former Federal Reserve chair, famously dismissed concerns of a housing bubble in late 2005.
In early 2007, he said that problems in the subprime mortgage market were unlikely to affect the broader markets or the wider economy.
In contrast, Burry diagnosed a housing bubble and anticipated its disastrous collapse.
His enormous, contrarian wager was chronicled in the book and movie "The Big Short." The investor pivoted from running a hedge fund to writing about his personal portfolio on Substack late last year.
Burry's third example seems to refer to internet startups juicing their growth during the dot-com bubble by selling to each other rather than to end customers.
He underlined how much higher startup valuations are today than during the internet boom in another comment this week.
He wrote: "Need to look to private companies — the dot coms never went public this round.
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