Burry AI – Investor Michael Burry compared today’s AI spending frenzy to the dot-com era, citing venture capital concentration, junk-bond issuance and enterprise “utility” skepticism. He also detailed new share purchases in Adobe, PayPal and Lululemon while questioning w
Michael Burry doesn’t speak like a man watching a trend from the sidelines. In a Substack post and a subscriber chat this week, the investor known for a famed bet on a housing crash turned his attention to the AI boom—and said it looks uncomfortably familiar.
“History is not a perfect guide, but I see so many indicators both technical and fundamental lining up for the same conclusion,” Burry told his subscribers on Substack Chat.
His conclusion points back to 1999. the year he described as “went where no market had gone before.” “And I would say so can this one. ” he continued. warning that the current market run is moving along a path he sees before—first through capital and debt. and later through the reckoning that follows excess.
Burry is not just arguing from charts. He wrote that he had purchased more shares of Adobe, PayPal, and Lululemon. He framed those buys as less about the headline story and more about what he called “the mass whale fall happening away from the main spectacle.” In his comparison to 1999. he said “the old economy and international stuff” got “ditched in favor of the All-American bubble.”.
From there, he pivoted to what he sees as the fuel behind the AI surge. He argued that AI is absorbing huge amounts of early-stage capital and debt issuance. He cited Apollo’s Torsten Slok. who wrote in a recent note that “87% of venture capital funding has flowed into AI this year. ” while the figure was “less than 40% for internet companies in 1999.”.
Burry then drew a second line from today’s capital markets to the dot-com era. He said a similar proportion of junk-bond issuance is linked to AI as was tied to the tech. media. and telecom industries in 2000. He added that “High yield debt at 38% today vs 40%-50% back then belies the idea that today’s AI debt issuance is cleaner. backed by more profitable companies today.”.
“It is just an asset bubble, plain and simple,” Burry wrote.
The part that seems to bother him most is the argument that this time is different because many AI-related companies look more profitable than the classic loss-making dot-com names. Burry dismissed that distinction. “We should remember VCs are funding loss-make companies like never before in history, and much more than in 1999,” he wrote.
In the same discussion. he argued that people discussing “loss-making dotcoms” often miss two things: that “the biggest cash flow machines of the time — telecom and cable companies — were part of the bubble. ” and that “this time there are far more loss-making companies losing far more money. only they haven’t gone public.”.
He also pointed to what he described as an earnings pattern in the AI era. In posts on his subscriber chat, Burry wrote that several “boy wonders” have made bank in the AI era using options and leverage—an echo of the late 1990s and early 2000s.
For Burry, the similarities don’t stop at money. He compared the hype around building the infrastructure for AI to the millennium-era call for global buildouts tied to the World Wide Web. “Just like the current data-center rush. the turn of the millennium saw broad calls for a global infrastructure buildout to support the World Wide Web. ” he said.
Then came the harder critique: whether the technology actually delivers where it’s supposed to. He flagged recent studies finding that AI has “very little utility” for enterprises and that there are “many abandoned AI projects already.”
He questioned whether enterprise demand for AI will surge in the years ahead—or cool due to “recession/war/business cycles/annual reviews for budget decisions in a more sane. post-AI FOMO environment?” He also wrote that consumers “have shown no willingness to be significant sources of revenue for AI products. ” because they can use large language models (LLMs) like ChatGPT for “free or close to it.”.
Burry’s tone sharpened further in a separate Substack post earlier this month, where he warned the AI boom was setting up to end like the dot-com bubble. “The market has jumped the shark,” he wrote. “The end of…this…is nigh.”
He added, “This, all of it, is the scene of the bloody car crash, minutes before it happens,” turning the comparison from a market argument into a countdown.
The through-line in Burry’s reporting—capital flowing into AI. debt tied to the theme. and doubts about utility and demand—lands as a single message: the odds may not be about whether AI can work. but whether the timing and scale of the rush resemble the conditions that preceded the dot-com collapse.
Michael Burry AI boom dot-com bubble venture capital junk bonds high yield debt Adobe PayPal Lululemon enterprise AI ChatGPT data center rush
So AI is basically the new dot-com bubble right?
I dunno, Burry buys Adobe and PayPal while saying it’s a bubble… so is he shorting or just vibing? Also “87% of VC into AI” sounds made up, like those stats always get quoted but nobody shows the source.
Wait, he’s comparing AI to 1999 but also says he bought more shares of Lululemon?? That makes no sense to me. Like if it’s going to crash, why would you add risk? Unless he means only some AI companies, but the article was kinda all over the place.
Every time someone says “this feels like 1999” the news forgets we still have different interest rates and stuff. Also venture capital going into AI doesn’t mean the whole market dies, it just means people are betting wrong faster. Burry’s always got these dramatic quotes and then he’s still buying stocks like normal, so I’m not sure what I’m supposed to do with this.