"The Big Short" Burry warns that AI bubble may be approaching its end The current market resembles the eve of the 2000 technology stock bubble.

Michael Burry, known for successfully predicting the U.S. real estate crisis, has warned that the current frenzy in the U.S. stock market for artificial intelligence (AI) is increasingly resembling the final stages before the bursting of the internet bubble. Burry wrote on Friday that during a long drive, he could hardly hear any discussions about topics other than AI on financial television and radio. He said, "It is being talked about incessantly, all day, all the time, and no one is talking about anything else." Burry believes that the market's reaction to economic data has gradually lost its logic. Despite the recent drop in the U.S. consumer confidence index to a historic low, the market chooses to ignore this risk and focuses more on the slightly better-than-expected April employment data. On that day, the S&P 500 index hit a new all-time high. He wrote, "Stocks go up or down now not really because of earnings or any economic factor. It's because they can go up." Furthermore, he stated that the market is currently going crazy over a "two-letter word" theme that everyone believes they understand, and this atmosphere reminds him of the market conditions in the last few months of the internet bubble in 1999 to 2000. Burry also compared the recent trend of the Philadelphia Semiconductor Index with the upward trajectory before the tech stock crash in 2000. Data shows that the Philadelphia Semiconductor Index has risen more than 10% this week, with a cumulative increase of 65% since 2026. In the past two years, a large amount of capital has been flowing into AI-related stocks, driving major U.S. stock indices to continuously set new all-time highs. Semiconductor companies and large tech stocks related to AI infrastructure and software have become the core DRIVE of this rally, and the wave of generative AI has further inflated market valuations. Meanwhile, well-known hedge fund manager Paul Tudor Jones has also compared the current AI market to the internet bubble period, but he believes that the bull market may still have further upside potential. In an interview with the media this week, Jones said that the current market environment is "very similar to 1999," about a year before the peak of tech stocks in early 2000. He expects that the current AI market may continue for another one to two years. However, Jones also warned that if valuations continue to rapidly expand, the magnitude of future market corrections could be quite astonishing. He said, "Just imagine, if the stock market goes up by another 40%, the total market capitalization of U.S. stocks as a percentage of GDP could reach 300% or even 350%. By then, the eventual correction in the market could be suffocating."