“Big Short” investor Michael Burry is clarifying an earlier call on why he believes that China is poised to win the global AI race.
On Saturday, the investor who accurately called the 2008 US housing market meltdown said that China would come out on top due to the country’s growing lead in energy generation capacity.
In a new X post, Burry explains that the US will lose the race if America continues to rely on Nvidia chips to scale the AI buildout in the coming years.
“This chart shows why China will win if Nvidia’s chips are the way forward.”
According to Burry, Nvidia’s innovation roadmap is fundamentally tied to rising power consumption rather than breakthroughs that materially reduce energy requirements.
“Nvidia’s development roadmap is essentially a power consumption roadmap. And innovation is just figuring out how to power and cool bigger, hotter silicon. Power needs keep climbing because efficiency gains cannot keep up with compute install. This chart shows that it is not a path to victory for the US.”
Burry emphasizes that China’s advantage is not only its current level of installed power capacity, but the rate at which that capacity continues to expand. Meanwhile, he says US grid expansion faces structural obstacles.
“Not only is China way ahead, but it will continue to press its advantage – the slope is the key. That is the acceleration of power generation development. US transmission grid development is actually decelerating due to permitting issues, while China is building transmission at will to match power output.”
Burry adds that investors are allocating massive amounts of capital in a competition where they are poised to lose.
“In fact, to the extent this is an AI arms race, US companies are plowing capital into a race they are structurally positioned to lose. So it cannot be an AI arms race, if the US can help it.”
Burry points to an alternative path, calling for a shift away from increasingly power-hungry general-purpose chips toward more specialized designs. But the famed short-seller notes that Nvidia’s dominance makes the transition difficult, describing its influence over the US AI ecosystem as deeply entrenched.
“The US needs to get away from bigger and bigger power-hungry chips and innovate with AI-tuned ASICs like nobody’s business.
Nvidia has a death grip on development through its investments and agreements with so many important US AI companies and startups. DOJ Antitrust is investigating and should act, but Trump probably stops that. It is left to the market to figure out that LLMs are not the way to AGI or ASI, and stop feeding the beast.”
Nvidia chips are currently one of the reasons why the US is still ahead in the AI race. Earlier this month, Atreides Management CIO Gavin Baker said that US export controls on Nvidia’s Blackwell chips will likely significantly increase the gap between Chinese and American frontier models.
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