Michael Burry Warns AI Bubble Could Burst Within a Year
Investor Michael Burry has accelerated his bearish outlook on the AI bubble, saying a major correction could arrive within a year rather than around 2028. He has replaced some direct short positions in Micron Technology and Nebius Group with put options expiring in June and September 2027. His bearish exposure also includes the SOXX semiconductor ETF, while he remains critical of Nvidia, Palantir and Oracle.
Burry cited heavy data-centre spending, debt-funded AI infrastructure and the risk of excess capacity. He also referred to Acer’s chief executive, who said memory supply, particularly DDR4, may be approaching equilibrium. Falling memory prices could pressure Micron after its shares rose more than 270% this year.
The change from short selling to put options limits potential losses but creates expiry risk. If the AI bubble corrects after the options expire, Burry’s bearish thesis may not produce gains. Traders should monitor memory prices, data-centre debt issuance, capital expenditure and whether major AI companies generate adequate investment returns. The AI bubble debate could increase volatility in semiconductor and technology stocks, with potential spillover into risk-sensitive crypto markets.
Neutral
The news does not directly identify a cryptocurrency or token, so its immediate price impact on crypto is likely neutral. In the short term, Burry’s warning could increase risk aversion and volatility across technology stocks. If traders reduce exposure to AI-linked equities, correlated crypto assets and AI-related tokens could face temporary selling pressure.
The longer-term effect depends on whether the anticipated AI correction materialises. A sharp decline in semiconductor stocks, weaker data-centre spending or tighter debt conditions could damage broader risk sentiment and weigh on cryptocurrencies. However, the positions are options with distant expiries, and Burry’s view is not evidence that an AI downturn is imminent. Crypto prices will remain more sensitive to liquidity, interest rates, regulation and digital-asset-specific flows. As a result, the direct effect on cryptocurrency prices is limited and best classified as neutral.