Michael Burry, the contrarian investor famed for his prescient bet against the U.S. housing market before the 2008 financial crisis, has shuttered his hedge fund and debuted a paid newsletter on Substack targeting what he calls the “AI bubble.”
Burry closed Scion Asset Management earlier this month, returning capital to investors and deregistering with the Securities and Exchange Commission (SEC) on November 10.
His new platform, Cassandra Unchained, charges $379 annually or $39 monthly, offering subscribers “a front row seat” to his views on stocks, markets, and bubbles — often framed through historical parallels. The newsletter drew more than 23,000 subscribers on its first day, quickly becoming Substack’s fastest-growing finance publication and surpassing more established players like Citrini Research.
In his inaugural posts, Burry issues a blunt warning on the current AI frenzy. He calls the boom a “glorious folly” fueled by excessive supply and compares Nvidia Corp., the dominant AI chipmaker, to Cisco Systems during the dot-com bubble, noting Nvidia’s stock price surge of over 200% this year has pushed its market valuation past $3 trillion.
Burry’s first post, “Foundations: My 1999 (and part of 2000),” recalls his early days as a neurology resident turned value investor. He draws a direct line between today’s AI enthusiasm and the late 1990s tech bubble, noting parallels in Federal Reserve Chairmen’s dismissals of emerging risks — then with housing in 2005 under Alan Greenspan, now with AI under Jerome Powell.
His follow-up post, “The Cardinal Sign of a Bubble: Supply-Side Gluttony,” is the first in a series titled “The Heretic’s Guide to AI’s Stars.” Burry highlights “catastrophically overbuilt supply” in AI hardware, warning demand is lagging far behind. He criticizes large cloud providers like Microsoft, Google, Meta, Amazon, and Oracle for accounting practices that, he alleges, inflate earnings by understating hardware depreciation and stock-based compensation.
Nvidia quickly rebutted Burry’s claims, issuing a detailed memo to Wall Street analysts denying allegations of fraud and defending the longevity and efficiency of its hardware and software ecosystem. CEO Jensen Huang and CFO Colette Kress publicly rejected bubble comparisons, emphasizing the company’s measured investments and denying any impropriety.
Burry reaffirmed his stance in a brief post on X, promising to publish deeper analysis on the platform. Nvidia’s shares dipped slightly in early trading following the exchange but ended higher amid broader market gains.
Burry’s return to X in late October, after a two-year break, had already sparked interest with cryptic posts hinting at large short positions on Nvidia and Palantir. His shift to a direct subscription model, free from fiduciary and regulatory oversight, allows him to share candid views and potentially reveal portfolio moves without SEC filings.
Despite Nvidia’s latest earnings report showcasing robust growth — with Q3 revenue hitting a record $57 billion, up 62% year-on-year, driven largely by a $51.2 billion surge in its data-center business central to AI infrastructure — and strong Q4 revenue guidance of approximately $65 billion, concerns about the sustainability of the AI boom persist.
With his move to Substack, Burry has unshackled himself from traditional investment mandates, offering a direct line of sight into his contrarian perspective. Burry’s warnings highlight ongoing debates over whether the AI market represents a lasting transformation or echoes past speculative bubbles.
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