Michael Burry, renowned for his prophetic investment strategies as depicted in “The Big Short,” made headlines over the recent weekend with a series of pointed social media posts targeting his critics and the soaring tech sector, particularly focusing on artificial intelligence (AI) companies. This outburst coincided with the launch of his new Substack, where he has begun sharing his market insights.
In a bold critique of OpenAI, the leading AI firm, Burry likened it to Netscape, suggesting that both companies share a trajectory leading towards significant financial trouble. He contended that OpenAI is “doomed and hemorrhaging cash,” a sentiment he expressed in response to Salesforce CEO Marc Benioff’s comments on large language models. Netscape, once a dominant force in web browsing, serves as a historical example of how even the most powerful tech companies can falter in the volatile market landscape of the 1990s.
Burry painted a picture of OpenAI as reliant on Microsoft, claiming that the tech giant is trying to keep the company afloat while simultaneously extracting intellectual property. He questioned the ongoing funding OpenAI receives, suggesting that the whole industry is anticipating a substantial IPO valued at $500 billion, which he believes is necessary for survival. He was particularly skeptical about OpenAI’s recent fundraising attempt, stating that raising $60 billion would not suffice to cover the company’s financial needs.
Burry’s critical analysis extended beyond just OpenAI; he has recently expressed skepticism toward Nvidia as well. After revealing a short position against the graphics card manufacturer last month, he prompted the company to address his allegations regarding unsold inventory of its GPUs. He stated his intent to gather evidence from various sources about the situation, reflecting a growing concern regarding the financial health of prominent players in the AI sector.
Additionally, Burry took the opportunity to defend his previous bearish market predictions, linking to articles discussing his past warnings about meme stocks and inflation. He highlighted that his forecasts from 2021 were eventually validated by significant market corrections. Citing the regional banking crisis earlier in 2023, he maintained that many past predictions should not be dismissed, questioning why critics would mock a short seller’s calls over long time spans.
His recent resurgence in social media activity marks a notable shift after a period of relative silence, where he opted to de-register his hedge fund. Now, through his Substack, he is openly critiquing market trends and expressing his views on what he perceives as looming dangers ahead for investors.
