2008 Crisis Predictor Warns of Potential Bubble, Suggesting Certain Investments Could Collapse
Investors are once again focusing on Michael Burry, the figure renowned for predicting the 2008 global financial crisis. This time, he has issued a warning that the explosion of investment in artificial intelligence (AI) has the potential to turn into a bubble that could burst sooner than previously anticipated.
Citing CNBC International on Monday (28/09/2026), Burry stated that he has accelerated his timeline regarding risks in the AI sector. The investor, known for his massive bets against the United States property market before the 2008 crisis, is now altering his investment strategy regarding several AI-related stocks.
Burry mentioned that he has begun shifting from short selling positions to using put options on several technology stocks. This strategy provides opportunities for profit should share prices decline within a specific period.
“In terms of fundamentals, I am accelerating my timeline,” Burry wrote in his investment newsletter. “The AI bubble may burst sooner than expected.”
Burry also revealed that while some changes in investment positions were made for tax reasons, the majority were driven by his belief that the valuations of several AI companies have relied too heavily on high growth expectations.
He has increased his put option positions on several companies, including chip manufacturer Micron Technology, AI infrastructure firm Nebius, and the iShares Semiconductor ETF (SOXX). He also updated his position regarding the data analytics software company Palantir Technologies.
Will AI spending cease? In his view, Burry cited research from the investment firm Ares Management, which warns that the AI industry currently relies heavily on the assumption of continuously increasing capital expenditure. According to the report, problems could arise if revenue from AI technology fails to meet the expectations of the massive investments companies have poured into the sector.
Burry believes that if companies begin to doubt the potential profitability of AI investments, several boards of directors may change their strategies and reduce large-scale spending in the sector. This perspective emerges while technology stocks remain one of the primary drivers of the US stock market’s gains.
Who is Michael Burry? The name Michael Burry became widely known after his story was featured in the film “The Big Short.” This tells the story of how he bet against the US housing market before the 2007-2009 financial crisis.
At that time, Burry identified many high-risk subprime mortgages that were overvalued by the market. He subsequently took a position contrary to the majority of investors and secured massive profits when the property bubble finally burst.
Now, Burry is once again taking a position against the market mainstream. He previously compared current stock market conditions to the period leading up to the bursting of the technology bubble in 1999-2000.
Nevertheless, technology stocks continue to record gains, and the Nasdaq Composite index recently reached new records. Several stocks targeted by Burry’s bets are still below their peak levels, including Micron, which is down approximately 16% from its record price, and Palantir, which is down about 10% from its highest level.