Michael Burry, the investor known from "The Big Short," has warned that the AI market rally is nearing its end and has expanded short positions against major AI-related stocks including NVIDIA and Palantir.
July 2026 · Market Watch
"The End Is Nigh" — Michael Burry Bets Against the AI Rally
The investor behind "The Big Short" is expanding bearish positions across chipmakers and AI-infrastructure names, calling the boom "mass addiction" and likening it to the 1999–2000 dot-com bubble.
+172%
Caterpillar's rise on AI-infrastructure demand — before Burry shorted it
−20%
LLM Token Expenditure Index, down from its May 2026 high
6
AI-linked stocks & indices now targeted with bearish bets
Caterpillar: the run-up Burry is betting against
Same unit — indexed share price, before vs. after the ~172% AI-infrastructure surge.
A near-tripling on AI-hype expectations is exactly the "speculation detached from fundamentals" Burry says he is shorting.
The short book
MU
Short position recently established
CAT
Shorted after a ~172% rise
NVDA · AMAT · TSLA
Bearish positions expanded
SOXX
Chip index near a 15-year valuation peak
The Bull Case
As in the dot-com era, the market may take time to peak. Optimists like Paul Tudor Jones suggest the rally could run another one to two years — and shorting AI is notoriously hard to time.
Burry's Warning
"The AI narrative may die a death by a thousand cuts — and I have only seen a few dozen so far." A falling token-spend index, he argues, is an early sign of cooling demand.
In his words
"The end is nigh. Dancing with the devil in the pale moon light."
He calls the AI trade "mass addiction" and says today's market "feels like the last months of the 1999–2000 bubble."
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