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Michael Burry – one of the key investors who featured in 'The Big Short' and predicted the financial crash in 2008 – has made another bold move, warning everyone that we've reach the 'beginning of the end' for AI as he bets against the leading tech.
You'd be hard pressed to avoid AI as an investor these days, as not only are almost all of the biggest companies associated and driven by the rapidly evolving tech – with 9 out of the 10 highest market caps matching this description – but many of the fastest growing stocks are linked to this very same market confidence.
Not everyone is all aboard the AI hype train, however, as there is a growing number of financial experts that have expressed their concern about the long-term stability of these stocks, warning that they're likely 'overpriced'.
One of these happens to be Michael Burry, who initially made his name by being among the first to profit from the subprime mortgage crisis, and his recent moves appear to suggest a similar line of thinking towards artificial intelligence.
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He has already made an eerie prediction about the future of AI on his social media channels, evoking an ominous quote from Jack Nicholson's Joker in 'Batman' to express that the 'end is night' and that the narrative surrounding AI is 'nothing more than mass addiction'.
As shared by investment experts at The Motley Fool, it appears as if Burry might know something that Wall Street doesn't again, foreshadowing the 'beginning of the end' with several bets against the market's dominant force.
You'd have to be pretty bold to go against the grain as much as Burry is right now, but he seems confident that the bubble is set to burst, and that could lead to a boost in cryptocurrency too if you believe the predictions of other billionaires.
Burry placed bearish bets in late June on companies like Applied Materials, Tesla, Caterpillar, and the iShares Semiconductor ETF, with the latter serving essentially as a move against the entire industry.
It doesn't make sense to do this at face value considering a growth of around 130% in the last year from this ETF alone – in part due to massive gains for AMD and Nvidia – but it could be the sign of an impending shift, as Burry has been right before.
Regular investors might want to move cautiously going forward in response to Burry's bets, as being caught in the middle of the crash when it happens is never a good idea.
You might want to think about investing your money elsewhere – perhaps even outside of the United States market entirely – but understandably many will be equally fearful of missing out on further gains in an AI industry that could just as easily continue on its upward trajectory.
