Michael Burry Compares AI Boom to Dot-Com Bubble in Substack Post

Michael Burry said the AI investment period shows technical and fundamental indicators that line up with the dot-com bubble period. Burry wrote in a Substack post and subscriber chat thread that history is not a perfect guide but that several metrics already match 1999 levels.

He noted that 87 percent of venture capital funding has gone to AI companies this year, compared with less than 40 percent for internet companies in 1999.

Burry stated that high-yield debt linked to AI now accounts for 38 percent of issuance, close to the 40-to-50 percent share tied to tech, media, and telecom in 2000. He added that venture capital is funding loss-making companies at higher rates than in 1999, even though many AI firms remain private.

Burry purchased additional shares of Adobe, PayPal, and Lululemon. He described these holdings as part of a "mass whale fall" occurring away from the main AI-related stocks.

Burry pointed to recent studies that found AI has very little utility for enterprises and that many AI projects have already been abandoned. He questioned whether enterprise demand will increase or decline due to budget cycles and economic conditions.

Burry also stated that consumers have shown no willingness to pay significant revenue for AI products, noting that large language models remain available for free or close to it. "It is just an asset bubble, plain and simple," Burry wrote.