Michael Burry: Trump cannot afford AI buildout to fall

Michael Burry's warning lands at a moment when AI infrastructure spending has become large enough to show up in the headline economic numbers. J.P. Morgan Asset Management estimates that AI-related investment contributed about 0.47 percentage points to the 2.1% pace of U.S. real GDP growth over the past year — roughly one-fifth of total growth after adjusting for imported hardware — and hyperscalers are expected to spend nearly $800 billion on capital expenditures this year. That is the backdrop for Burry's claim that the buildout is the only thing keeping the economy going.

Burry's position is unusual because it does not simply dismiss the boom. He argues that the spending is supporting economic growth while simultaneously questioning whether the investors funding it will earn acceptable returns. Recent reports show him increasing bearish exposure to Micron, Nebius, Palantir and semiconductor stocks. The AI trade is also intersecting with Trump's disclosed investment portfolio: his accounts reported 1,156 securities transactions in July worth an estimated $79 million to $270 million, including Microsoft and Amazon sales valued between $5 million and $25 million each, followed days later by smaller purchases of both stocks.

The stakes, as the article frames them, hinge on whether the capital flowing into GPUs and data centers ultimately produces durable returns. For Nvidia, Oracle, CoreWeave and other AI-linked stocks, the test is likely to show up in utilization, financing costs and free cash flow. Burry's thesis may be proven or undercut by those numbers — not by the size of the spending itself.