Legendary Investor Michael Burry Says AI Market is Too Hot, Similar to Dot-com Bubble

JAKARTA, KOMPAS.com - Legendary investor Michael Burry has warned that the market euphoria towards artificial intelligence (AI) is beginning to resemble the final phase of the dot-com bubble in the late 1990s.

Burry is widely known for successfully predicting the US housing market crisis in 2008, which was later depicted in the film The Big Short.

In a post on the Substack platform on Friday (8/5/2026), Burry stated that investor attention is now overly focused on AI.

“AI is relentless. No one talks about anything else all day,” wrote Burry, as reported by CNBC.

Burry highlighted the situation where stock indices continue to rise even as economic indicators show weakness.

Last Friday, the S&P 500 index hit a new all-time high after investors positively responded to US April 2026 employment data that was slightly better than expected.

At the same time, consumer sentiment data showed a sharp decline.

“Stocks don’t rise or fall because of jobs or consumer sentiment,” wrote Burry.

“Stocks keep rising because they have been rising. Based on a two-letter thesis that everyone thinks they understand. … It feels like the last months of the 1999-2000 bubble,” he continued.

The SOX index rose more than 10 percent this week. Throughout 2026, the index has surged around 65 percent.

The rise in semiconductor stocks is occurring because investors are chasing companies deemed to benefit from advancements in generative AI.

Over the past two years, chip company stocks and tech giants have been the main drivers of the US stock market rally.

Enthusiasm for AI has caused valuations of many technology companies to skyrocket sharply.

A similar warning has also come from billionaire investor Paul Tudor Jones.