The Big Short Investor Who Predicted 2008 Says This Is Worse...

"Michael Bur revealed that he placed a $1 billion short, a $1 billion bet against Nvidia and Palanteer because he believes this bubble is about to pop."

"Michael Bur says AI stocks are a massive bubble that's about to pop"

"corporate AI investment grew from $103 billion in 2019 to about $252 billion in 2024, which is an increase of around 2 and a half times over those 5 years."

"if we're producing products but people don't have money to buy those products, that's a problem."

"Investors have very high expectations for where these AI stocks need to go. And if companies don't meet these sky-high expectations, that could mean less dollars go into those companies."

"How long will that last? Who knows? But that's what we're seeing right now."

"if companies slightly miss expectations, it can cause a big downturn in the stock itself."

"the amount of dollars going into AI stocks resembles the amount of dollars going into dotcom companies."

"there is a saturation of value within a few key tech stocks."

"Michael Bur says AI stocks are a massive bubble that's about to pop and he's putting his money where his mouth is."

"Michael Bur points out that we're starting to see slower growth in this AI industry. Take a look in this chart. Michael Bur is trying to point out that cloud computing growth, which is the backbone of artificial intelligence, is starting to slow down because we're seeing Amazon, Alphabet, and Microsoft seeing a slowdown in growth in cloud computing."

"Today, the NASDAQ, which is still primarily comprised of tech companies, which are now primarily AI, has a PE ratio average of about 35 times earnings, which is a lot lower than where we were leading up to the dotcom bubble, but it's still higher than the average because the average historical NASDAQ PE ratio is 20 times earnings."

"Today, the Magnificent 7, which is a group of the seven largest tech companies, including Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia, and Tesla, those seven companies alone make up 34% of the S&P 500. So, we have much more saturation of value into a few companies than we had before. And Nvidia by itself makes up more than 7% of the value of the S&P 500, which again shows more concentration today than we had before."

"Here are three possibilities that you want to keep your eye on. Possibility number one is the job market. The artificial intelligence industry is replacing a lot of human jobs. So although the industry is booming, although the adoption is booming, although company profits are growing because of AI, there's less and less human need. Now, that doesn't mean there's not going to be a need for humans. But what that means is the adoption rate for human jobs with AI is growing slower than the reduction of human jobs. Or in plain English, today AI is taking jobs faster than it's creating jobs."

"Chart number one was where he explained that the amount of dollars going into AI stocks resembles the amount of dollars going into dotcom companies. And generally when you see such a large investment into any industry, it is then followed with some sort of recession."

"The second chart that he showed was a closed loop that there are some major players in the AI industry that are dominating and it's kind of like every AI company is just feeding each other. So the money looks like it's a lot of money going into AI when the money is just circulating between a few key players."

"Needle number one is jobs. Because right now AI is ending jobs faster than it's creating jobs. How long will that last? Who knows? But that's what we're seeing right now. And if people don't have incomes to buy the products that we're producing, that could create an economic problem."

"Number two is expectations. Investors have very high expectations for where these AI stocks need to go. And if companies don't meet these sky-high expectations, that could mean less dollars go into those companies."

"It is getting harder than ever for the average person to get a job and build wealth because traditional entry-level skills are now being automated by AI. But this is the silver lining because for those of you that are go-getters that want to go the extra mile, this shift is going to create more millionaires than ever before."