"There was no bubble even during the subprime"… 'The Big Short' protagonist warns again about AI bubble

Powell recently dismissed the bubble, saying "AI companies are making profits"

Burry sharply criticized Powell's remarks via X

"Greenspan also said there was no bubble before the subprime"

Michael Burry, known as the protagonist of 'The Big Short', once again criticized the artificial intelligence (AI) craze. He expressed concern that Jerome Powell, chairman of the U.S. central bank (Fed), was dismissing bubble risks by saying that AI companies are actually generating profits.

Burry pointed out on the 24th (local time) via X (formerly Twitter) that the current AI investment frenzy is very similar to the late 1990s dot-com bubble. He said, "Investors take exponential growth for granted and overlook profitability concerns," interpreting the massive capital spending under expectations that AI technology will reshape the economy as a 'warning sign'.

Burry especially mentioned past remarks by Fed officials alongside the current situation to emphasize that history could repeat itself. He recalled that in 2005 then-Fed chairman Alan Greenspan said, "There are no signs of a bubble in housing prices." Two years later, the subprime mortgage crisis erupted, and Burry's 'The Big Short' became reality.

He sees a similar pattern appearing this time as well. He pointed to Powell's recent dismissal of bubble concerns by saying, "AI companies are actually profitable," and said, "It is eerily similar to Greenspan's 2005 remarks."

As he had shorted Amazon at the peak of the dot-com bubble, Burry is publicly maintaining a pessimistic view toward current leading AI stocks such as NVIDIA and Palantir.

He wrote on X, "I debated whether to come back, but I came back. I will say something clearly this time as well," showing his intention to continue warning the market.

New York=Park Shin-young, correspondent nyusos@hankyung.com