Renowned investor Michael Burry, who rose to fame for predicting the 2008 mortgage crisis and served as the inspiration for the protagonist in the film The Big Short, has warned of the risk of a massive crash in the US stock market comparable to Black Monday in 1987. The comment came as the S&P 500 hit fresh record highs. The financier believes the current Wall Street rally is detached from fundamentals and is being fueled by hype around artificial intelligence technologies.
Michael Burry remains one of the leading skeptics of the AI boom, arguing that the strong demand for computing infrastructure is supported by unstable financial schemes. In particular, he points to risks from circular financing involving key industry players such as OpenAI and Nvidia. In his view, market gains amid artificially low volatility are forcing systematic and momentum funds to take on record leverage, creating a dangerous self-reinforcing cycle.
While shorting is highly risky, Burry confirmed he continues to hold short positions against several tech companies. He notes that almost all of his bets are profitable, except for his position against Nvidia, whose market capitalization exceeds $5 trillion. Warning market participants against excessive optimism at valuation peaks, the investor stressed that in such conditions “sometimes the only winning move is not to play.”
