"The Big Short" Investor Just Moved Up His AI Crash Timeline — From 2028 to Next Year
Michael Burry, the investor who made $700 million calling the 2008 housing collapse before most people saw it coming, just told his newsletter subscribers something investors in AI stocks should sit with: he's no longer betting on a slow bubble. He's betting on a fast one.
Here's what actually changed, and why:
→ In August, Burry's base case was 2028 for an AI bubble burst. After a weekend of research, he moved that timeline up to 2027 — and in his latest newsletter said he's "more certain than ever" his bearish outlook plays out within the next year
→ He swapped short stock positions in Micron, Nebius, Palantir, and the iShares Semiconductor ETF for put options instead — a shift toward instruments with a shorter time horizon and higher leverage, meaning bigger gains if he's right, bigger losses if he's wrong, and a bet he wants to resolve sooner
→ He cited a report from Ares Management arguing the entire AI investment boom rests on one fragile assumption: that companies will keep increasing capital spending indefinitely, even though the AI revenue meant to justify that spending hasn't been fully validated yet
→ His core worry isn't just overvaluation — it's debt. He argues massive data-center buildouts are increasingly financed with borrowed money, not free cash flow, which is a very different kind of fragile than "stocks are expensive"
→ He's not hiding behind vague caution either — he's reportedly holding roughly $1.1 billion in bearish bets against Nvidia and Palantir specifically, with new Nvidia puts expiring next September
What makes this notable isn't that Burry is bearish — he's been bearish on AI stocks for over a year, and the market has proven him wrong on timing so far; the Nasdaq hit a record just last week. What's notable is the shift in conviction and leverage. Moving from shorts to puts, and from a 2028 "someday" to "within the next year," is Burry saying he now believes the mechanism of the unwind is becoming visible, not just the eventual outcome.
Being early to call a bubble and being right about when it pops are two very different skills — Burry's own history includes both. Worth watching, not worth panicking over on its own.
Do you think debt-financed AI capex is the real risk here, or is this just another cycle of "this time it's different" skepticism that gets proven wrong again?
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