Elon Musk vs Michael Burry: World's richest man says AI internet traffic will outpace humans, market expert asks who is paying

World's richest man Elon Musk believes that AI agentic traffic will "vastly" exceed human usage, but veteran American investor Michael Burry quickly questioned who is paying for these AI agents, raising worries over the sustainability of the AI frenzy.

SpaceX and Tesla CEO Elon Musk has long been known for his support for artificial intelligence. During a recent interview, Musk said artificial intelligence (AI) and robotics could lead to widespread economic abundance, and its pace of progress has become so rapid that it cannot realistically be stopped.

Meanwhile, Burry is known for pointing out bubbles against the overall market tide. The American investor, best known for correctly predicting the 2008 housing crisis, has recently been highlighting excessive AI spending by hyperscalers, warning investors that a massive crash may be coming.


Musk says AI to vastly exceed humans in internet traffic

Reacting to a Cloudflare forecast that AI bot traffic could reach 1,000 times the level of human traffic within five years, Elon Musk said, “AI agentic Internet traffic will obviously VASTLY exceed human usage. Not a close call at all.” In a post on X, Musk highlighted that Cloudflare’s forecast is accurate.

“And the only system that can support the insanely fast bandwidth growth needed by AI is Starlink…It’s possible that Starlink may end up doing >90% of IP traffic, even if competitors 10X their bandwidth,” he added.


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Michael Burry asks 'Who will pay?'

Reacting to Musk’s post, veteran market investor Michael Burry said it is a lower bar than most think, but he still does not know who will pay for these AI agents to socialise. Burry has been betting against several AI heavyweights including Tesla, Caterpillar, Nvidia, Applied Materials, Palantir and other companies.

Recently, Burry said he continues to believe that the market is close to a major top, warning of a similar crash to that of 1987 when Dow Jones recorded a historic 23% plunge which led to the introduction of regulatory circuit breakers. However, the market investor noted that the S&P 500 making new highs likely will bring new money into the market.

Burry continues to hold his short positions in the iShares Semiconductor ETF, Micron, Nvidia, Caterpillar, Palantir, Tesla and Applied Materials. “Again, shorting is not for everyone,” Burry wrote. “I must short. Most should not.”

Earlier this year, Burry wrote on a Substack post that he sees many indicators, both technical and fundamental, lining up for the same conclusion as the Dotcom crash. "1999 went where no market had gone before, and I would say so can this one...It is already there on a number of indicators," he said, arguing that massive venture capital flows, rising AI debt issuance, and extreme market optimism are creating conditions where valuations may detach from economic reality.

Also read | Big Short fame Michael Burry is betting against Nvidia, AMD, Micron and other chipmakers. Is a massive AI crash coming?

(With inputs from agencies)

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