'The Big Short' investor bets $1 billion against 'AI bubble' after accusing tech giants of hiding disturbing

[Kaz]

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'The Big Short' investor bets $1 billion against 'AI bubble' after accusing tech giants of hiding disturbing truth: 'One of the more common frauds'

 

Michael Burry is famous for one thing: accurately predicting the 2008 housing crisis and subprime mortgage crash.

 

According to CNN, Burry's Scion Asset Management fund placed bets that share prices will drop for two AI companies, noting it "bought roughly $187.6 million in puts on Nvidia and $912 million in puts on Palantir." 

 

 

'The Big Short' investor bets $1 billion against 'AI bubble' after accusing tech giants of hiding disturbing truth: 'One of the more common frauds'

WWW.THECOOLDOWN.COM

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Michael Burry, of The Big Short fame, warns about the potential risks of investing in AI companies.

 

 

I think the market is in a bubble and I have considered trying to short it, but I'd be in trouble if it went up before crashing.

 

I find it interesting that he is betting against Palantir.

Edited November 16 by Kaz

[Kaz]

His actual post

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Understating depreciation by extending useful life of assets artificially boosts earnings -one of the more common frauds of the modern era. Massively ramping capex through purchase of Nvidia chips/servers on a 2-3 yr product cycle should not result in the extension of useful lives of compute equipment. Yet this is exactly what all the hyperscalers have done. By my estimates they will understate depreciation by $176 billion 2026-2028. By 2028, ORCL will overstate earnings 26.9%, META by 20.8%, etc. But it gets worse. More detail coming November 25th. Stay tuned.

 

[GanjaSMK]

I only wish and hope he's correct in some way. Pretty plain to see the circular path and reinvestment cycles; vapormoney while increasing stock assets. What a drag this modern era is in some ways. 

 

This whole ball of wax has to melt at some point.