Michael Burry says Anthropic IPO papers show AI industry is 'catastrophically vulnerable'. What the 'Big Short' investor sees

Popular American investor Michael Burry has been ramping up his bets against AI stocks, warning that the artificial intelligence bubble is set to burst. After Claude-maker Anthropic filed its IPO papers, Burry pointed out several red flags, saying that they show that the AI industry is “catastrophically vulnerable”.

The company is preparing to market its shares after it filed for an IPO under the ticket ANT, although the number of shares to be released is yet to be determined. Its eventual listing will give public-market investors a chance to buy into one of the leading developers of AI models, but the company’s rapid growth comes with mounting infrastructure costs, substantial losses and questions over how long its current growth trajectory can be sustained.

Also Read | Risks spelled out for Anthropic investors include possible harms from runaway AI


Burry in a Substack post pointed to Anthropic's huge spending commitments, slowing revenue, and tangled ties, according to a Business Insider report. The American investor noted that the AI company has struck deals to buy about $537 billion of compute from Amazon, Alphabet, and Microsoft, and reached preliminary agreements worth hundreds of billions more with others such as SpaceXAI. This puts its total commitments at about 12 times its current annual run-rate revenue.

"This is not stated clearly in the S-1, and in my view it is the most deserved headline from it," Burry wrote in a Tuesday Substack post. "Overall slowing of growth is not attributed to a decline in tokenmaxxing, but I did not expect that to be mentioned,' he added.

Also Read | Anthropic files for US IPO amid AI boom, rising costs and safety concerns

Earlier during the heightened buzz around prospective IPOs of Anthropic and OpenAI, Burry said the listing could lead to massive capital destruction, arguing that these companies should be prevented from going public. “For the benefit of humanity, the markets should tank hard and prevent the OpenAI and Anthropic IPOs,” he wrote in the post on X.

Michael Burry’s AI warnings

The popular American investor who famously correctly predicted the 2008 financial crisis, recently said that the market is currently in a 'denial' mood, a phase that could last six to nine months, as seen during the previous 2000 and 2008 crises.

He recently cited data which showed that it would take only a season in which AI revenue disappoints the massive capital expenditure that hyperscalers are putting behind it. “In that scenario, a handful of boards, predisposed to redeploy capital toward the highest-conviction bet, would simply need to conclude that the highest-conviction bet has shifted,” the report said.

This comes after Burry said in August that the AI crash could begin from 2028. However, his latest comments imply that he expects this to happen sooner. Recently, he said the President Donald Trump-led US administration cannot afford to let the AI boom fail. He explained that AI infrastructure buildout has become a critical support for the US economy, keeping very little room for the Trump administration to let the ongoing AI boom weaken, Stockwits reported. Notably, Burry has been shorting AI-linked stocks and warning investors of a sharp selloff ahead.

Also Read | Michael Burry's top 10 life lessons for GenZ: 'Buy half the house you can afford'

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.