# Investor skepticism and bubble warnings on AI > Live situation record from CLSTR: https://clstr.news/situations/investor-skepticism-on-ai-investments > Updated: 2026-09-14T05:28:22.000Z. Sources: 42. Developments: 14. Since early July 2026, fund manager Michael Burry has warned that rapid AI-related investment expansion may be forming a bubble. Burry has taken short positions in Nvidia, Micron, Oracle, Tesla, Palantir, and Applied Materials, specifically targeting Nebius. He criticized Nebius for changing its server depreciation schedule to improve reported profits, though his timing faced pressure when Nebius reported second-quarter revenues rising 454% to $582 million, causing shares to surge 34%. By mid-August, warnings of market instability intensified. Bank of America noted that market euphoria is reaching extreme levels, with its Bull & Bear Indicator nearing maximums not seen since 2021. Financial analyst Ed Dowd characterized the AI market as the ‘greatest bubble of all time,’ comparing it to the dot-com era and predicting a potential correction of 40% to 50% due to high capital costs and insufficient power supplies. Former Goldman Sachs CEO Lloyd Blankfein also raised concerns regarding risk concentration within the AI trade. In late August, Bridgewater Associates founder Ray Dalio warned that current stock valuations mirror the speculative excesses seen before the 1929 and 2000 market crashes, noting a cyclically adjusted price-to-earnings (CAPE) ratio of approximately 41. Burry has since expanded his short positions against Nvidia, Oracle, Palantir, Nebius, and Caterpillar. Regarding Nvidia, Burry expressed skepticism that the company can maintain extreme margins and a near-monopoly indefinitely. Despite Nvidia reporting a 106% year-over-year revenue increase to $96.2 billion in its recent quarterly results, Burry maintained his bearish stance through short positions. Concerns have also emerged regarding whether chip demand is being artificially supported by complex financing structures, such as residual value guarantees provided by Nvidia to facilitate data center projects. Federal Reserve officials have joined the scrutiny. ## Claims - Michael Burry warned of a potential 1987‑type stock market crash. (corroborated by 5 sources) - Burry holds a short position in the iShares Semiconductor ETF (SOXX). (corroborated by 5 sources) - Burry holds short positions in Micron Technology, Nvidia, Caterpillar, Palantir, Tesla and Applied Materials. (corroborated by 5 sources) - Burry criticizes the sustainability of AI‑related financing, saying low volatility fuels leveraged fund exposure. (corroborated by 5 sources) - Burry posted his warning on Substack on Tuesday, August 4/5, 2026. (corroborated by 5 sources) - Michael Burry previously predicted the 2008 housing‑market collapse. (corroborated by 5 sources) - The S&P 500 reached a new record high, rising about 1.9% on the day of Burry's warning. (corroborated by 4 sources) - All of Burry's short positions are currently profitable except the one against Nvidia. (corroborated by 4 sources) ## Timeline ### 2026-09-14: Fitch Ratings warns of US recession risk amid AI-driven market disruption Fitch Ratings warns that AI-related equity market disruptions could trigger a US recession, while global investors simultaneously pull back from Indian stocks due to high valuations and weak AI prospects. 2 sources. https://clstr.news/cluster/fitch-ratings-warns-of-us-recession-risk-amid-ai-driven-market-disruption ### 2026-09-11: Michael Burry bets on Lululemon while shorting Nvidia Investor Michael Burry has taken opposing positions on Nvidia and Lululemon, shorting Nvidia despite its record earnings and buying Lululemon due to its compressed valuation and potential acquisition appeal. 2 sources. https://clstr.news/cluster/michael-burry-bets-on-lululemon-while-shorting-nvidia ### 2026-09-11: AI sector faces potential bubble concerns amid market speculation Economists warn of a potential AI bubble, noting that high market expectations for data centers and AI productivity could lead to significant stock market corrections if returns fail to meet projections. 3 sources. https://clstr.news/cluster/ai-sector-faces-potential-bubble-concerns-amid-market-speculation ### 2026-08-28: Michael Burry increases short positions against major AI stocks Investor Michael Burry is increasing short positions against Nvidia, Oracle, and Palantir, citing concerns over AI valuations and the sustainability of chip demand driven by complex financing. 3 sources. https://clstr.news/cluster/michael-burry-increases-short-positions-against-major-ai-stocks ### 2026-08-23: Ed Dowd warns of massive AI market bubble Financial analyst Ed Dowd warns that the artificial intelligence market represents the ‘greatest bubble of all time,’ citing risks of a 40% to 50% correction due to power shortages and high capital costs. 2 sources. https://clstr.news/cluster/ed-dowd-warns-of-massive-ai-market-bubble ### 2026-08-17: Ray Dalio warns of AI market bubble mirroring 1929 and 2000 Ray Dalio warns that the AI market shows signs of a bubble, with valuations echoing the speculative excesses seen before the 1929 and 2000 market crashes. 2 sources. https://clstr.news/cluster/ray-dalio-warns-of-ai-market-bubble-mirroring-1929-and-2000 ### 2026-08-13: Michael Burry bets against AI-linked stocks Investor Michael Burry is shorting AI-related stocks like Nebius, Oracle, and Nvidia, warning that the current market calm and AI investment hype may precede a significant downturn. 5 sources. https://clstr.news/cluster/michael-burry-bets-against-ai-linked-stocks ### 2026-08-11: Federal Reserve and Michael Burry warn of potential market instability Federal Reserve officials and investor Michael Burry have issued warnings regarding market instability, citing potential AI-driven investment bubbles and unusual stock market calm. 2 sources. https://clstr.news/cluster/federal-reserve-and-michael-burry-warn-of-potential-market-instability ### 2026-08-08: Wall Street experts warn of potential market correction amid record highs Financial experts, including Michael Burry and Bank of America, warn of potential market pullbacks and extreme euphoria despite recent record highs and FOMO-driven rallies on Wall Street. 8 sources. https://clstr.news/cluster/michael-burry-warns-of-potential-market-crash-similar-to-1987 ### 2026-08-06: Michael Burry shorts Oracle and Nebius amid AI sector concerns Investor Michael Burry has taken new short positions in Oracle and Nebius Group, warning of overextension and leverage risks within the AI and cloud infrastructure sectors. 2 sources. https://clstr.news/cluster/michael-burry-shorts-oracle-and-nebius-amid-ai-sector-concerns ### 2026-08-05: Michael Burry warns of 1987‑type stock market crash as S&P 500 hits record high Michael Burry warns a 1987‑type crash as the S&P 500 hits a record high, citing fragile AI‑driven rally and holding short positions in SOXX, Micron, Nvidia, Caterpillar, Palantir, Tesla and Applied Materials. 11 sources. https://clstr.news/cluster/michael-burry-warns-of-1987-style-crash-as-sp-500-hits-record-high ### 2026-07-31: Michael Burry Cautions on AI Bubble as Silicon Valley Sees Growth Fuel Michael Burry warns of an AI bubble, expanding shorts on Nvidia and Micron, while Silicon Valley venture capitalists view the frenzy as essential for innovation. 4 sources. https://clstr.news/cluster/michael-burry-cautions-on-ai-bubble-as-silicon-valley-sees-growth-fuel ### 2026-07-26: Investor Steve Eisman and Michael Burry Criticize AI Spending and Prediction Markets Steve Eisman warns AI hype may stall, preferring chip makers over Alphabet/Microsoft, while Michael Burry labels prediction‑market platforms like Kalshi as unregulated gambling that harms users. 3 sources. https://clstr.news/cluster/investor-steve-eisman-and-michael-burry-criticize-ai-spending-and-prediction-markets ### 2026-07-08: Michael Burry bets against AI chip makers amid valuation concerns Michael Burry has increased short bets on AI chip firms like Micron, Nvidia and Applied Materials, warning of a possible 30% correction amid valuation excesses. 2 sources. https://clstr.news/cluster/michael-burry-bets-against-ai-chip-makers-amid-valuation-concerns --- Cite as: Investor skepticism and bubble warnings on AI. CLSTR, https://clstr.news/situations/investor-skepticism-on-ai-investments