Michael Burry earned his fame by correctly anticipating the 2008 mortgage crisis and shorting the mortgage bond market to make a windfall, as chronicled in the best-selling Michael Lewis book The Big Short and the movie of the same name. He recently closed down his money management fund, but he still provides market commentary for his fans.
This week, he took a shot at artificial intelligence (AI) companies as concerns arise about the idea that the pace of AI development needs to be slowed, saying, "There is nothing AI to slow down."
Burry has asserted that the AI sector is in a bubble many times, and he put his money where his mouth is with literal puts on Nvidia (NVDA +0.81%) and Palantir Technologies (PLTR +1.03%). He recently sold his Nvidia position and part of his Palantir position to free up cash, but he retains several short positions in the tech sector. Meanwhile, Wall Street is broadly bullish on both. Should investors trust Burry's negative views?
Should AI slow down?
Recently, there has been a surge in the level of worried talk about the damage that AI could do to human society. The volume has picked up since it was revealed that some AI agents have gone rogue and autonomously hacked external companies' systems in pursuit of their own ends.
Such events have led several high-profile AI developers to warn that the consequences of unchecked AI development could be disastrous, and to call for a slowdown.
Image source: Getty Images.
Anthropic CEO Dario Amodei, for example, published a note urging a slowdown, "pacing the rate of capabilities advancement so that risk prevention has time to keep up." OpenAI CEO Sam Altman and SpaceX CEO Elon Musk both chimed in with notes of caution as well.
AI companies like Nvidia and Palantir have benefited from breathtaking advances in AI, and if those technologies were to be exposed as not quite as revolutionary as the world thinks, their stocks could plummet. Nvidia's share price growth has already started to slow down from its previous torrid pace. It's up 13% this year, roughly the same as the S&P 500. It has also become much cheaper, trading at 27 times earnings. Palantir stock is roughly flat year to date, but it's still quite expensive, trading at a P/E ratio of 148.
The pessimist's take
Burry asserts that the call for a development slowdown is a planned move to cover for companies that are slowing down anyway:
Let's all take a moment to understand how self-serving it is for OpenAI, Anthropic and other execs of big hyperscalers to talk of slowing things down.
-- Cassandra Unchained (@michaeljburry) Sept. 14, 2026
1. LLMs are not AI and won't be AGI. There is nothing AI to slow down.
2. Competition is coming up fast, slowing benefits...
This isn't surprising given his previous views on AI, but so far, AI is demonstrating value for users, which is why investors are tolerating all of the AI-related capital expenditures, which Nvidia expects to reach $3 trillion to $4 trillion by 2030.
NASDAQ: NVDA
Key Data Points
Burry's been right before, and he made a fortune off his analysis. But he isn't necessarily always right. Should investors trust his analysis here?
Investors should certainly be prepared for any outcome in AI. Whether Burry's right or not, investors should maintain a diversified portfolio and avoid being overly concentrated in AI or any other industry. You don't have to short the AI sector, but you shouldn't bet only on it, either.
