Michael Burry, the investor made famous by The Big Short, has escalated his warnings about the artificial intelligence boom, saying this time that a severe market downturn that prevents OpenAI and Anthropic from going public would be beneficial to humanity.
“For the benefit of humanity, the markets should tank hard and prevent the OpenAI and Anthropic IPOs,” Burry wrote Tuesday on X.
Burry went further in replies to his post, saying that the two AI companies could “suck up” and ultimately destroy “TRILLIONS of dollars of capital,” adding that the financial damage would be “the least of the damage they do.”
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He also responded “Along those lines” to a user who joked about crashing the market so that “Skynet cant IPO,” invoking the fictional AI system from the Terminator films.
The comments extend a bearish argument Burry has been developing around the economics of frontier AI. His concern is not simply that AI stocks have become expensive. He argues that the industry is committing enormous amounts of capital to models, chips and data centers before the returns from that spending have been established.
That thesis puts the planned public-market debuts of OpenAI and Anthropic at the center of the debate.
Both companies require enormous amounts of capital to develop more capable models and secure the computing infrastructure needed to operate them. An IPO would provide access to a much broader pool of investors and potentially give both companies additional financing capacity as their infrastructure requirements expand.
OpenAI CEO Sam Altman said earlier this month that taking the company public in 2026 would be “ill-advised” amid concerns surrounding AI safety. Anthropic, meanwhile, is expected to pursue an IPO after the November midterm elections, according to a prospectus reviewed by Reuters.
Burry’s latest comments follow an earlier post this week in which he said he was “more confident than ever” that his bearish AI thesis would play out over the next year. He previously identified 2028 as his base-case timeline.
He said the change in his timeline prompted him to adjust his positions against several companies and indexes, including Nvidia, Palantir, Micron, Oracle and the Nasdaq 100.
At the heart of Burry’s position is the scale of investment required to build the AI ecosystem.
Technology companies and their infrastructure partners have committed enormous sums to data centers, processors, networking equipment and electricity capacity. Burry has argued that much of that expansion is increasingly supported by debt and complex financing arrangements.
“If the spending stops or slows, it all comes apart,” he wrote earlier this week.
His argument rests on the assumption that AI infrastructure spending must continue at exceptionally high levels to support current valuations and growth expectations. If companies eventually reduce capital expenditure, the consequences could extend beyond individual AI developers to chipmakers, cloud providers, data-center operators and lenders that have financed the buildout.
Higher interest rates would add another pressure point by increasing the cost of financing the infrastructure boom.
If that happens, there will be a more consequential risk than a conventional correction in AI stocks. A sharp decline in valuations could make it more difficult for private AI companies to raise capital on favorable terms, while a broader market selloff could reduce the appetite of public investors to finance companies with enormous infrastructure requirements and uncertain long-term profitability.
Burry has previously pointed to debt-fueled spending on chips and data centers as a key vulnerability. He has also questioned whether accounting practices, stock-based compensation and financing arrangements across the AI industry may make underlying economics look stronger than they are.
Those arguments remain Burry’s investment thesis rather than evidence that OpenAI or Anthropic will fail or that an AI market collapse is imminent.
The broader market has so far provided little confirmation of an imminent breakdown. AI-related companies have continued to attract capital and have been among the major drivers of equity-market gains this year. That resilience creates a significant test for Burry’s thesis. The AI industry has continued to raise money, expand computing capacity and generate growing demand even as investors debate whether the resulting valuations can ultimately be supported by cash flows.
Therefore, the IPO question carries implications beyond simply accessing public capital for OpenAI and Anthropic. A listing would expose their financial performance, infrastructure commitments and customer economics to a much broader investor base at a time when the sustainability of AI spending is already under intense scrutiny.
Burry’s position is that a market collapse before those offerings reach investors would prevent additional capital from flowing into what he considers an unsustainable investment cycle. His warning is therefore less a prediction about the mechanics of an IPO than an argument about whether the financial system should continue supplying capital to frontier AI at its current scale.
While the market continues to finance the expansion, Burry is betting that the cost of that expansion will eventually become too large to ignore.