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Michael Burry Eyes AI-Tech Bubble in 2025

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  Published in Stocks and Investing on Monday, November 17th 2025 at 9:05 GMT by Business Insider

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Michael Burry and the New AI‑Tech Bubble: A Look at the 2025 Capital Landscape

The 2025 Business Insider piece “The Big Short” revisits the legendary investor Michael Burry—most famously portrayed in The Big Short for predicting the 2008 mortgage collapse—and asks whether his contrarian eye will find value in the current AI‑driven tech boom. The article weaves together Burry’s storied past with a sharp-eyed commentary on today’s market dynamics, focusing on capital expenditures, valuation multiples, and the cyclical nature of tech cycles.

1. Burry’s Credible Legacy

The narrative begins with a brief biography of Burry, the Harvard economics graduate who turned a modest student‑loan‑financed fund into a multi‑billion‑dollar investment vehicle. His early career was marked by a contrarian thesis on subprime mortgages, a move that earned him both acclaim and notoriety. Business Insider notes that his track record—especially the 10‑fold profit from his 2007 bet—continues to command respect in an era where many “gurus” have lost credibility.

2. The AI‑Tech Boom: A Double‑Edged Sword

The article then outlines the present AI‑tech surge: rapid adoption of generative models, cloud‑native infrastructure, and AI‑integrated product suites. It highlights how capital outlays for R&D, data acquisition, and infrastructure have surged, pushing valuations higher than any previous tech cycle. While AI’s potential to transform businesses is undeniable, Burry’s caution is rooted in history. The article references a link to a Forbes piece that details how past tech bubbles—think dot‑com, 2016‑18 fintech—were often inflated by optimistic assumptions about near‑term profitability.

3. Burry’s Current Thesis

Burry’s stance, as reported, is that the AI market has reached “excessive enthusiasm” relative to its intrinsic value. The Business Insider writer quotes a recent interview where Burry argues that many AI companies are over‑leveraged, lacking clear monetization pathways, and building “impossible” timelines for product maturity. He compares the current wave to a “second‑hand bubble” where the next generation of investors is trying to replicate past successes without fully accounting for structural differences.

Crucially, the article shows that Burry is not a blanket skeptic. He is exploring a handful of AI‑focused opportunities, particularly in niche sectors where data scarcity or regulatory barriers create natural entry barriers. For instance, Burry reportedly considers investments in AI‑driven cybersecurity firms that secure critical infrastructure—a domain where high barriers to entry and steady demand could support longer‑term growth.

4. Capital Expenditure Trends

A core component of the piece is an analysis of capital expenditures (CapEx) in the tech sector. The Business Insider article cites data from the U.S. Bureau of Economic Analysis that shows CapEx growth spiking at a 9% annual rate for AI‑centric enterprises, outpacing other technology sub‑segments. Burry’s perspective is that this surge in spending is “pumping money into a space where returns are still uncertain.” He references a research report from the Harvard Business Review (linked in the article) that argues excess CapEx can lead to resource misallocation, especially when companies over‑invest in “next‑gen” products that never achieve scale.

5. Investor Sentiment and the Path Forward

The writer then contextualizes Burry’s thesis within broader market sentiment. The article notes that while institutional investors such as BlackRock and Fidelity are pouring billions into AI ETFs, retail investors are also driven by hype, which fuels short‑term price spikes. Burry’s voice is quoted as cautioning that such exuberance often erodes into a “correction” phase that can last 12‑18 months.

The article also touches on Burry’s potential role in guiding other investors. The linked Bloomberg piece details how Burry’s fund now has a stake in a portfolio that includes AI‑driven logistics platforms. While the stakes are modest, the article argues that Burry’s involvement may lend credibility to a more tempered investment approach—one that balances the hype with rigorous valuation analysis.

6. Implications for 2025–2026

The Business Insider piece wraps up by projecting what Burry’s stance could mean for the next few years. The article posits that if AI valuations continue to inflate, a correction could be triggered by either regulatory crackdowns (as governments tighten data privacy rules) or by a failure of early AI deployments to generate expected revenue. In such a scenario, Burry’s contrarian bets—particularly in AI sectors with tangible use‑cases—could outperform the market. The article also highlights that even in a downturn, Burry’s track record suggests that he will “pick winners who are able to navigate the shifting sands of technology.”

7. Take‑Away Lessons

1. History is a teacher – Burry’s past success reinforces the value of skepticism in over‑valued sectors.
2. Capital outlays need scrutiny – High CapEx can be a warning sign if the underlying business model lacks clarity.
3. Selective AI bets – Not all AI firms are created equal; those with regulatory or data‑security advantages may offer a more defensible moat.
4. Market cycles repeat – Even with transformative tech, the same fundamental forces—valuation, liquidity, and human psychology—drive bubbles and corrections.

In summary, Business Insider’s article offers a nuanced view of Michael Burry’s assessment of the AI‑tech wave. It juxtaposes his past record of spotting market mispricing with a current analysis that highlights both the unprecedented opportunities and the lurking pitfalls of today’s AI boom. For investors seeking to navigate the 2025 tech landscape, the piece underscores the importance of combining data‑driven insights with a disciplined, historically informed approach—qualities that Burry exemplifies.