Michael Burry Sees AI Stocks Heading for a Dot-Com Style Crash

Michael Burry, the investor from The Big Short who bet against the housing market in 2008, is back online with sharp warnings about AI companies. In a series of X posts over a recent weekend, he called out what he sees as an overhyped AI trade, drawing direct lines to the dot-com bust of the late 1990s. He’s short Nvidia and predicts trouble for OpenAI and Palantir. CNBC says he expects the AI-driven market to fall before businesses cut tech spending.

OpenAI’s Path Looks Like Netscape’s

Burry wrote on X that “OpenAI is the next Netscape, doomed and hemorrhaging cash.” Netscape dominated web browsers in the mid-90s but crashed hard after its IPO as a symbol of dot-com excess, according to Business Insider. He added Microsoft is propping it up off its balance sheet while pulling out intellectual property. Even a $60 billion raise or $500 billion IPO wouldn’t cover its cash burn, Burry said. TradingView News noted he sees OpenAI facing the same fall as Netscape despite talk of a $1 trillion valuation. Seeking Alpha covers his Netscape parallel.

Nvidia Draws Cisco Comparisons

Burry has a short position in Nvidia and compared it to Cisco from the dot-com days. Cisco boomed on internet infrastructure demand then tanked when it dried up. He questions Nvidia’s growth, pointing to stock dilution from $112.5 billion in compensation costs and possible warehoused GPUs. “Calling for pics and proof of Nvidia GPUs being warehoused in mass quantities,” he posted on X, per Business Insider. Nvidia sent a memo to analysts pushing back, but Burry called it weak. WebProNews reports he forecasts an AI bubble burst in 2025, with Nvidia facing big write-offs from overbuilt data centers and fast chip obsolescence.

Palantir in the Crosshairs Too

Burry lumped Palantir with the overhyped crowd, comparing it to DiamondCluster—a consulting firm that spiked in the dot-com era before selling for $380 million, per Seeking Alpha. He’s short Palantir as well and doubts subscription revenue hype, like most Substack users staying free, as noted in TradingView News. TheStreet picks up his Palantir call.

Bigger Picture: Defending His Bear Case

Burry hit back at critics in those X posts, linking to his past wins like meme stock crashes and 2021 inflation warnings before prices peaked at 9%. He argues short sellers don’t hold for years and dismissed reporters questioning his 2023 bank crisis call that resolved fast. All this comes after he shut his hedge fund, started a Substack for market takes, and predicts a market correction from AI capex waste—trillions spent needing impossible revenue growth, per WebProNews.