The end of AI is electricity, and behind electricity is copper! The "Big Short" bets on the resource gap behind the AI computing power frenzy.

Title context: The end of AI is electricity, and behind electricity is copper! The "Big Short" bets on the resource gap behind the AI computing power frenzy. Text: Michael Burry, known as the "Big Short," continues to stay away from the overcrowded, heavily leveraged AI computing power theme trade, seeking value in other areas by taking positions in globally renowned copper miner Ero, Brad Jacobs-led QXO, and three deeply discounted stocks focused on home furnishings, food retail, and animal health. Michael Burry has long held a skeptical stance on AI computing power expansion and the AI infrastructure investment frenzy. Therefore, the most noteworthy logic for retail investors in the "Big Short" Burry's latest positions and investment layout is that Burry prices "AI company valuations and earnings quality" separately from "the physical procurement demand generated by AI construction" that is, Burry separately evaluates the investment value dominated by the computing power chain among AI infrastructure-related links and the resource demand brought about by AI construction. While firmly questioning the investment returns of certain AI stocks, he is bullish on the copper resources needed long-term for data centers, power grids, and distribution system expansion. Burry's recent skepticism toward the AI computing power investment craze in global stock markets has mainly centered on the extreme valuations of popular AI computing power-related stocks, capital expenditure returns, equipment depreciation, and future payment commitments. In the position adjustments disclosed on September 9, he reduced portfolio risk by selling put options on NVIDIA Corporation and Palantir expiring in December 2026 without rolling them over, while still maintaining short stock positions on both companies, as well as put options on Palantir and QQQ ETF (QQQ being the ETF tracking the Nasdaq 100 index, known as the "bellwether of AI and tech stocks") expiring in 2027. At the time, the three largest short stock positions were Oracle Corporation, Palantir, and "AI neocloud" leader Nebius. On September 19, he further expanded his focus to Amazon.com, Inc., Meta, Alphabet, Microsoft Corporation, and Oracle Corporation, estimating that the off-balance-sheet commitments of the five companies including leases not yet commenced, procurement, and guarantees exceeded a staggering $3 trillion. He expressed concern about a "catastrophic severe mismatch" between long-term fixed expenses and rapidly iterating AI hardware and yet-to-be-realized commercial returns, warning that "when the music stops, these off-balance-sheet commitments will quickly become real liabilities." These latest market developments and public information all highlight that he maintains his bearish judgment on the leaders of the AI computing power industry chain while proactively adjusting his short-selling tools and position durations. Away from the cheers of the AI party, seeking overlooked value Burry ignores AI's "cheers," finding opportunities in copper, QXO, and three other stocks While staying away from the overcrowded, heavily leveraged popular AI computing power stocks, Burry is indirectly betting on AI through ERO, saying that data center construction will increase copper demand, while new mines take 18 years to come online. "The party in the house is packed, driving AI-related stocks higher again today, but I largely ignore those 'cheers,'" the "Big Short" investor said in a Substack subscription article. Burry named five companies: Ero Copper (ERO.US), QXO (QXO.US), Temple & Webster, Sprouts Farmers Market (SFM.US), and Zoetis (ZTS.US). He also stated that he holds QXO common stock and its mandatory convertible preferred stock. Burry is indirectly betting on AI through Ero, a copper and gold producer focused on Brazil. "Everyone in that house is going to need a lot of copper," he said. COMEX copper futures settled at $6.6865 per pound on Monday, about 2% below the record set on September 9. Driven by mine production disruptions, low Chinese inventories, and pre-holiday restocking ahead of China's National Day, the international copper benchmark LME copper futures has risen 19% year-to-date and 46% over the past 12 months. Its year-to-date gain has outpaced the SPDR S&P 500 ETF Trust (SPY.US), Invesco QQQ Trust (QQQ.US), and SPDR Dow Jones Industrial Average ETF Trust (DIA.US), which returned approximately 13%, 18%, and 9%, respectively. Burry acknowledges that the current rally partly reflects temporarily weak supply. His long-term investment thesis is built on a severe mismatch between copper demand and the time required to develop new mines. Citing Apollo chief economist Torsten Slok, Burry noted that the number of major copper discoveries containing at least 500,000 tonnes of copper resources has fallen from double-digit levels annually in the 1990s and 2000s to one or two per year in recent years, with none in 2025. New deposits take 18 years to come online, while AI data center copper demand can materialize within two to three years. S&P Global, Inc. projects that total global copper consumption will increase from 28 million tonnes in 2025 to 42 million tonnes in 2040. Burry believes Ero is a higher-cost copper producer whose margins could expand significantly if copper prices remain elevated. "Ero common stock suits me just fine," he wrote in the subscription article, calling it a medium-sized position. Ero maintained its 2026 production guidance of 67,500 to 77,500 tonnes, with C1 cash costs of $2.15 to $2.35 per pound. Burry also praised the management team that took over in early 2025, saying it delivered on "three fairly difficult-to-achieve promises," and added that a forensic review of the company's accounting "found no problems." Although ERO shares have more than doubled over the past year, Burry still believes the company's valuation represents a significant discount compared to larger copper miners. On Stocktwits, retail sentiment on ERO fluctuated between "neutral" and "bearish" over the past week, though post volume doubled and the stock's follower count grew 5% over the past month, indicating rising retail interest. Burry also said he is focused on supporting Brad Jacobs' M&A integration strategy at QXO. Burry also holds QXO common stock and Series B mandatory convertible preferred stock with a specified dividend rate of 5.5%. "The stock has fallen significantly, and I see an opportunity to participate," he said. QXO, led by United Rentals, Inc. and XPO founder Brad Jacobs, is consolidating the fragmented building materials distribution market through serial acquisitions. Burry believes that scale expansion and solid execution could drive a valuation re-rating, though the stock remains affected by "housing market and interest rate disruptions, not to mention diesel price disruptions." Burry favors QXO's preferred stock, noting its current dividend yield of 7.4% and that dividends are cumulative. Unless converted earlier, these securities will automatically convert into common stock on or about May 15, 2028. "The common and preferred are roughly equally attractive, but I like the downside protection the dividend provides," he said. On Stocktwits, retail sentiment on QXO rose from "bullish" a week ago to "extremely bullish," while monthly post volume surged 467% and the stock's follower count grew 4%. Burry increased his stake in Australian online furniture retailer Temple & Webster, which trades over-the-counter under the ticker TPLWF, calling it "a fairly large position." The stock has fallen about 82% over the past year amid market concerns about housing and consumer spending. Fiscal 2026 revenue grew 11% to A$665 million, while net profit fell 62% to A$4.3 million. Burry said he plans to publish the full investment thesis soon. The short-focused investor also "slightly increased" his positions in Sprouts Farmers Market and Zoetis, completing this round of buying. Sprouts shares have fallen about 43% over the past year, while Zoetis shares have been cut in half amid weak companion animal-related demand and lowered guidance. Burry said Zoetis "has always appealed to me," but is now "extremely unpopular with the market," with neither a pandemic-related boost nor any AI connection, and currently lacking any market "popularity." On Stocktwits, retail sentiment on Zoetis remained "bearish" over the past week, with post volume down 75%, though the stock's follower count grew 9% over the past month. Meanwhile, retail sentiment on Sprouts improved from "bearish" a day earlier to "neutral," but remained below the "bullish" level of a week ago; post volume fell 67%, while follower count was essentially flat, growing only 0.1% over the past month. The "Big Short's" contrarian investment map: bearish on AI valuations, but the end of AI is electricity and behind electricity is copper Michael Burry, known as the "Big Short," while questioning the valuations and earnings quality of certain popular AI computing power stocks, has chosen to be bullish on the demand for power grids and distribution systems amid the booming construction of AI data centers. The pull-through effect of grid and distribution system expansion on copper demand has won Burry's favor, and he is seeking investment opportunities from it. Michael Burry's core positive thesis is slow supply response: copper mines coming online in recent years may take about 18 years from discovery to production, while data centers can be built and operational within two to three years, creating an obvious time gap between new procurement demand and mine supply. S&P Global, Inc. projects that global copper demand will grow from 28 million tonnes in 2025 to 42 million tonnes in 2040, an increase of about 50%, including contributions from AI, electrification, and other economic activities. Therefore, Burry's copper investment is about finding the resource link where construction demand can be realized but supply cannot expand quickly. Applied to Ero Copper, he is betting on the earnings elasticity brought by both copper prices and improved company operations. The company confirmed its 2026 copper production guidance of 67,50077,500 tonnes, with C1 cash costs of $2.15$2.35 per pound, and expects higher production in the second half with costs declining as operations improve. According to Burry's latest assessment, Ero still trades at a valuation discount relative to larger copper miners. Its higher costs mean thinner initial profit margins, but when production, sales volume, and costs are controlled, rising copper prices can bring strong profit growth; the management team's delivery on operational promises adds company-level support to this price elasticity. This constitutes an investment approach combining three factors: "resource supply-demand, operational improvement, and valuation discount." Copper mining companies with producing resources, executable expansion projects, and stable supply networks are expected to gain more durable demand support during the scaling of AI inference. As inference calls, agent tasks, and online services expand, computing power demand will transmit to server capacity, power supply, and distribution construction. The IEA (International Energy Agency) latest estimates that global data center electricity consumption will increase from 485 TWh in 2025 to 950 TWh in 2030, nearly doubling. Copper thus enters power cables, transformer windings, distribution equipment, and rack busbars, where its conductivity helps control resistive losses in high-power equipment; short-distance high-speed interconnects within racks also use copper cables and related connector components, for example NVIDIA Corporation GB200 NVL72 uses copper cable cartridges for intra-rack connections. Power supply infrastructure constitutes the main source of copper demand, while high-speed copper interconnect more reflects AI technology value-added around signal integrity, high-speed connectors within data centers, and cable manufacturing. At the same time, longer-distance links within data centers are also driving accelerated penetration of optical interconnect components and CPO technology. Corresponding to corporate earnings, miners mainly gain profit elasticity from resource scarcity, sales volume, and copper prices; traders mainly gain opportunities in sourcing, logistics, financing, and spread management; and high-speed cable manufacturers capture the value of product upgrades. The other four companies reflect value restoration and capital allocation logic. QXO's appeal comes from Brad Jacobs' experience in consolidating the fragmented building materials distribution market, as well as the efficiency gains and valuation re-rating that may emerge after scale expansion; Burry holds both common stock and Series B mandatory convertible preferred stock with a specified dividend rate of 5.5%, with 7.4% being the current dividend yield calculated at the then-current price. Temple & Webster, Sprouts Farmers Market, and Zoetis respectively represent contrarian positions in home furnishings, food retail, and animal health.