Michael Burry has a way of appearing at just the moment the market wants to hear from him least. Each time investors trick themselves into thinking the party will last forever, the “Big Short” guy returns, like a financial ghost of Christmas future, to remind people that euphoria has historically been the final pit stop before it all goes to hell. And once again, Burry is sounding a message Wall Street can’t stand: The stock market is in bubble territory — and the tech world’s crown jewel, OpenAI (estimated valuation: over $1 billion) may be on its way to what he’s calling a “Netscape fate.”
From anyone else, this would smack of attention-seeking. From Burry, it sounds like déjà vu. He has been early before, acutely early, but ultimately correct. And this time, the question is not just one of valuation or hype — it’s one of fragility.
Burry has been sounding the alarms for months that investors have deluded themselves into believing the AI boom promises perpetual growth. To him, the mood feels familiar: that whiff of frenzied optimism when everyone wants in on a hot asset, what he calls “the hysteria stage” when rational cares fly out the window as untested technologies or markets transform everyday people into speculators and suckers, winners and losers. He believes that the market is behaving as if profit didn’t matter, debt doesn’t matter, competition doesn’t matter and risk has magically disappeared under the magic AI cloud.
But it’s his remarks on OpenAI that everyone focused on. It’s not random to compare the company to Netscape — it’s a history lesson. Netscape wasn’t a failure. It was a pioneer. It changed the internet forever. But it also soared close to the sun. It outgrew its defenses. It became the emblem of a new era, then it lost control of the story as that new era arrived with the giants — Microsoft most of all — rolling in with greater resources, deeper infrastructure and an appetite for destruction against anything that augured to challenge them.
Burry’s thesis is straightforward: While OpenAI may be the face of the AI revolution today, history is unkind to early stars when giants awaken.
OpenAI has enemies that have deeper pockets, more computer power, better distribution and greater political influence. Apple, Amazon, Google, Meta (formerly Facebook), Microsoft — they’re more than just big tech firms. They’re military-grade economic forces. And Burry believes the concept that OpenAI can continue to stay ahead of all of them forevermore is “expenses-as-incessant-inevitability” — a lofty vision, cloaked in daydream. He’s not doubting OpenAI’s innovation. He’s doubting its staying power.
He also sees something else in the market — a sort of willful blindness. Investors aren’t in the mood for AI disillusionment. They would rather not think about a world in which returns are flat. They don’t want to acknowledge that valuations have gotten much further ahead of fundamentals. They’ve decided AI solves everything. Labor shortages. Productivity issues. Profit slowdowns. Inflation pressure. Revenue stagnation. So strong has the narrative become that to express skepticism feels like heresy.
And that is precisely when Burry wakes up.
His bubble call isn’t about timing a crash tomorrow. It’s about seeing just how weirdly disconnected the market has become from reality. He cites soaring stock prices while consumer wallets are tightening, weakening manufacturing data, geopolitical chaos and companies that fail to produce anything like the productivity gains AI purportedly promises. He perceives a market that prices perfection and turns a blind eye to friction.
Burry’s critics say he is doing what he has always done — betting against the optimists. But that is ignoring the larger question. It’s a rare warning of doom from him. They’re about discipline. It’s about knowing that hype cycles draw investors into dangerous places long before the fundamentals catch up to justify it.
As for OpenAI, Burry is not saying the company is toast. He knows how the landscape is changing. The early winner is not always the enduring champion. Tech history is littered with past trailblazers that got lapped — MySpace, BlackBerry, Yahoo, Napster, Netscape. They didn’t disappear because they were bad. They disappeared because the world around them had changed.
Burry obviously believes that AI will change everything — but he also thinks investors are overlooking a fact of history: Revolutions rarely reward the first mover what people think they do. And to him, that is where the true bubble lies: not in the technology itself, but rather in the fantasy that one company or one stock can forever outstrip gravity.
Whether he is right this time around, and how soon we’ll find out, is anyone’s guess. Burry’s visions have a way of aging like wine — ignored, mocked and then reread years later with uncomfortable clarity. For now, he’s back to doing the one thing he does best: playing the guy who sees the cracks before everyone else does.
And if the history of Wall Street has one lesson to impart, it is: Even when people think they don’t want to hear from Michael Burry, they probably should.
