Michael Burry, the investor who nailed the 2008 housing market collapse, issues a dire warning, saying that even the richest nation on Earth won’t be able to save the AI bubble.
Burry issues his warning on X in response to a post by legendary investor George Noble, who says that OpenAI is falling apart in real-time.
Noble highlights the ChatGPT creator’s rapidly deteriorating balance sheet, noting that OpenAI is flashing “all warning signs.”
“OpenAI lost $12 BILLION in a single quarter, according to Microsoft’s own fiscal disclosures. Deutsche Bank estimates $143 billion in cumulative negative cash flow before the company turns profitable. Their analysts put it bluntly: ‘No startup in history has operated with losses on anything approaching this scale…’
Here’s the big math problem nobody wants to discuss:
It’s going to cost 5x the energy and money to make these models 2x better.
The low-hanging fruit is gone.”
To add to OpenAI’s financial woes, Noble says that Elon Musk is suing the firm for up to $134 billion.
“Markets can price risk. But they can’t price chaos. And OpenAI is chaos dressed up in a $500 billion valuation.”
Burry takes Noble’s warning to another level, saying that OpenAI is just the tip of the iceberg.
“This is not surprising and will not end with OpenAI. All the capital being spent and lent by the richest companies on Earth will not buy enough time, by the very definition of mania. The government will pull out all the stops to save the AI bubble, to save the market [and] to save the economy. The problem is too big to save, again by that very same definition.”
Just last week, Burry predicted a market crash year, calling it the Panic of 2026/2027, amid the belief that almost all AI companies will go bankrupt.
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