Michael Burry Warns of AI Bubble, Suggests Crash Needed Before OpenAI and Anthropic IPO
Famous investor Michael Burry stated that a market crash preventing OpenAI and Anthropic from going public would benefit humanity by stopping trillions of dollars from being destroyed in an AI valuation bubble. He also accelerated his timeline for a major AI market correction from 2028 to within the next year while maintaining short positions against major tech stocks. Burry's warnings reflect mounting skepticism among traditional financial figures regarding the massive, debt-fueled capital expenditures required to train and run frontier AI models. If top AI startups face delayed or derailed public listings, it could trigger a broad reassessment of valuations across the tech sector and compute supply chain. Burry highlighted short positions targeting companies including Nvidia, Palantir, Micron, Oracle, and the Nasdaq 100 index, arguing that chip and data center investments funded by debt are highly sensitive to interest rates. While Sam Altman noted that a 2026 OpenAI IPO might be unwise due to AI safety concerns, prospectuses suggest Anthropic could seek a public listing following the US midterm elections.
## BACKGROUND
Michael Burry achieved global recognition for successfully predicting and shorting the US subprime mortgage bubble before the 2008 financial crisis, a story documented in 'The Big Short'. OpenAI and Anthropic are two of the world's prominent generative AI companies developing foundation models, which require expensive computing infrastructure and substantial funding rounds.