Michael Burry, the investor best known for predicting the 2008 housing crisis, has warned that the artificial intelligence boom is a massive bubble that will eventually burst and harm both the stock market and the wider economy. Writing on X, he said, “The government will pull out all the stops to save the AI bubble to save the market to save the economy,” but added, “The problem is too big to save.”
OpenAI’s troubles shows bigger AI risks
Burry made these comments while he was responding to a post by former hedge fund manager George Noble, who claimed that “OPENAI IS FALLING APART IN REAL TIME.”
This is not surprising and will not end with OpenAI.
— Cassandra Unchained (@michaeljburry) January 21, 2026
All the capital being being spent and lent by the richest companies on earth will not buy enough time-by the very definition of mania.
The government will pull out all the stops to save the AI bubble to save the market to… https://t.co/aSqbheWzHS
Noble pointed to rising competition, soaring costs, growing losses, and Elon Musk’s lawsuit as major challenges facing OpenAI. Burry agreed and warned that the issues extend far beyond one company, saying, “This is not surprising and will not end with OpenAI.”
Massive AI spending seen as a sign of mania
According to Burry, the enormous amounts of money being poured into AI will not be enough to prevent a collapse. He warned that the vast sums “being spent and lent by the richest companies on Earth will not buy”
On his Sub stack, Burry has compared OpenAI to failed dot-com companies from the early 2000s, writing, “OpenAI is the next Netscape, doomed and hemorrhaging cash.” He said he is shocked that the company sparked a multi-trillion-dollar infrastructure race and added that he would short OpenAI if it were a publicly traded company.
Big tech’s heavy AI bets increase the stakes
Regardless of the warnings, OpenAI’s annualised revenue has reportedly grown from $2 billion in 2023 to over $20 billion last year. At the same time, America’s most valuable technology companies are investing heavily in AI, raising concerns that any collapse could have serious consequences for the overall market and economy.
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