Mark Spitznagel predicts massive market crash following AI-driven rally

Mark Spitznagel, founder of Universa Investments, predicts that a monumental market crash will follow a final, “euphoric rally” driven by the current AI boom. While Spitznagel notes that the AI trend likely has more room to run, he warns that the subsequent collapse could be the largest experienced in a lifetime.

Spitznagel, known for his “Black Swan” tail-hedging strategy, described his fund as one of the most bearish vehicles available, even though it has allowed him to remain bullish over the last four years. He expressed agreement with Michael Burry regarding concerns over overinvestment in microchips and data centers by AI hyperscalers, though he suggested Burry may misjudge the timing of a downturn.

He cautioned that the economy is “rolling over” as the full impact of recent interest rate hikes has yet to be felt. Spitznagel noted that while he expects to become an even more prominent bear in the coming months, the market is not yet at the breaking point.