The investor who nailed the 2008 US housing market meltdown warns the artificial intelligence boom is setting the stage for a wave of bankruptcies and write-downs, warning that a market panic as early as 2026 or 2027 remains a real possibility.
In a new post on X, Michael Burry responds to a set of predictions made by Barron’s senior writer Tae Kim, who believes that Nvidia will report “blowout numbers” in the coming quarters with the chipmaker’s NVL72 server architecture.
According to Nvidia, the GB200 NVL72 is designed to deliver 30x faster real-time large language model (LLM) inference, supercharges AI training, and delivers breakthrough performance.
Says Tae Kim,
“It will become one of the largest cycles in technology history, akin to the iPhone versus Blackberry. The clear signs are there in the latest quarter with Nvidia posting its first accelerating revenue growth in two years and triple-digit networking segment growth.”
Beyond hardware, Kim also laid out a sweeping view of how AI could upend the digital economy. He predicted that most search queries will migrate to AI chatbots and that ChatGPT will regain momentum with new models trained on large Blackwell clusters.
“ChatGPT will add digital advertising in its consumer product. The first iteration will not be great. The second version will improve. The third version will work great… Google will go from 95% search monopolist to a number 2 or number 3 player in the AI chatbot market, which will dramatically lower its margins over the cycle. Serving the search index was a gold mine. That era will end.”
Burry says he agrees with Kim’s rosy predictions for Nvidia and OpenAI, but still believes the AI boom could potentially collapse as soon as this year.
“And still, return on investment will continue to fall, almost all AI companies will go bankrupt, and much of the AI spending will be written off. Will it be the Panic of 2026? 2027? Does not have to be.”
In a Google Doc discussion among tech leaders posted on Substack, Burry said that AI companies have no real moat as they all offer the same benefits. He compares AI to Warren Buffett’s 1960s escalator, noting that it benefits the shopper or the user but not the department store owner because the competitor across the street had one as well.
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