'Big Short' investor Michael Burry says he's 'more confident than ever' of an AI reckoning in 2027

Michael Burry says he's "more confident than ever" that the AI boom will hit the skids next year.

The "Big Short" investor said he's placed levered bets against AI stocks using bearish put options.

Burry said the AI boom is riding a debt-fueled spending wave that is showing signs of strain.

Michael Burry says the AI bubble might pop sooner than he thought.

The investor of "The Big Short" fame said in a Substack post on Monday that he's "moving timelines up," chiefly because he expects "the bubble in AI may burst sooner than later."

Burry said he's "more confident than ever before" that his pessimistic thesis will "play out over the next year." He previously said his " base case " was 2028.

The shorter timeframe led Burry to want " more leverage in my short positions," so he covered his outright shorts and replaced them with bearish put options, he said.

Those contracts give him the right , but not the obligation, to sell a stock at a fixed strike price before a set expiry date. If the stock falls below that price prior to that date, he can exercise his puts and sell the stock at a premium to the market price, or simply sell the puts for a profit.

Burry said he switched out his outright shorts for puts on Nvidia, Palantir, Micron, Nebius, Oracle, Caterpillar, the iShares Semiconductor ETF, and the Nasdaq 100, all expiring between June and December next year.

He's also closed his CoreWeave short with plans to buy puts once they're attractively priced, and has also bought fresh puts on MetLife, he said.

Burry shared the key details for each position. For example, he said that he bought Nvidia puts that expire next September and are struck in the mid-$100s, or less than half the AI chipmaker's $229 stock price at Monday's close.

Moreover, he said that his Nasdaq 100 are struck in the $24,000s and expire next September, signaling he expects the tech-heavy index to slump by close to 20% within the next year, from around $30,300 today.

Burry said AI companies are borrowing and spending an unsustainable amount to build data centers to power the technology, setting themselves up for disaster.

"If the spending stops or slows, it all comes apart ," he wrote, adding that the cash being used is "increasingly debt, with strings attached."

Burry noted that rising interest rates could turn the screw on AI companies as well, given that private equity, private credit, and their insurers are financing so much of the infrastructure buildout.

"Higher rates stress every part of that chain," he said.