Michael Burry, the investor renowned for his foresight in predicting the 2008 housing crash, is diving into a new venture with the launch of a Substack newsletter. The announcement follows his recent decision to deregister his hedge fund, as Burry aims to provide detailed insights into what he perceives as an ominous trend in the artificial intelligence market.
Capitalizing on his substantial following on X, previously known as Twitter, where he boasts 1.6 million followers, Burry's newsletter named 'Cassandra Unchained' seeks to shed light on his increasingly bearish perspective. The subscription comes at an annual fee of $379 and bears a stark warning: the markets are veering into bubble territory once again.
In his launch announcement, Burry drew comparisons between the tech frenzy of the late 1990s and the current AI surge, criticizing policymakers for overlooking these bubbles. He referenced key historical notes, like a February 2000 report from the San Francisco Chronicle highlighting his short position on Amazon, and a 2005 statement from then-Federal Reserve Chair Alan Greenspan downplaying the risk of a housing bubble.
Burry sees a worrying return of history's patterns. As during the dot-com era, investors today are projecting exponential growth, ignoring concerns about profitability, and investing heavily in capital with expectations that AI will fundamentally reshape the economy.
Though current Fed Chair Jerome Powell has dismissed fears of an AI-driven bubble by stating that AI companies are indeed profitable and differ from past market booms, Burry finds this reminiscent of reassurances offered during previous speculative periods.
In October, Powell remarked, 'This is different in the sense that these companies, the companies that are so highly valued, actually have earnings and stuff like that.' Burry perceives such statements as an eerie echo of assurances from two decades ago.
Infamously known for shorting Amazon during the height of the dot-com boom, Burry continues his critical stance by expressing bearish views on AI market leaders such as Nvidia and Palantir.