Investor Michael Burry, whose prescient bet against the U.S. housing bubble earned him fame during the 2008 financial crisis, has emerged as one of the most prominent skeptics of the latest wave of technology exuberance, casting doubt on whether two of the world’s most celebrated private companies, SpaceX and Anthropic, deserve valuations approaching or exceeding $1 trillion.

In comments posted on his Substack discussion forums over the weekend, Burry questioned the fundamentals underpinning both companies, arguing that investors are increasingly being driven by hype, momentum, and artificial intelligence enthusiasm rather than traditional valuation metrics.

His remarks come at a pivotal moment for global markets, with AI-related stocks, infrastructure providers, and private technology companies commanding some of the richest valuations seen since the dot-com era. The debate is particularly relevant as both SpaceX and Anthropic are widely expected to pursue public listings in the coming months, potentially creating some of the largest technology IPOs in history.

For SpaceX, Burry’s skepticism centers on the growing gap between financial performance and investor expectations.

The Elon Musk-led company recently disclosed in its IPO filing that it generated $18.7 billion in revenue last year while posting a net loss of $4.9 billion. Despite those losses, the company is reportedly targeting a valuation of roughly $2 trillion, a figure that would instantly place it among the most valuable corporations in the world.

Burry was unconvinced.

“Any move up will be on hype and technicals,” he wrote. “Nothing in that S-1 suggests it is worth $1 trillion let alone $2 trillion.”

His comments strike at the heart of a growing debate among institutional investors about how to value companies operating in industries with enormous long-term potential but relatively limited current profitability.

SpaceX occupies a unique position in global markets. It dominates commercial rocket launches through its Falcon program, controls the rapidly expanding Starlink satellite network, and is increasingly viewed as a strategic infrastructure provider for governments and enterprises. Many investors argue that its valuation reflects not only current earnings but also future monopolistic advantages in space transportation, satellite communications, and defense technologies.

Yet Burry’s concerns highlight a familiar warning from previous market cycles: transformative businesses do not automatically justify unlimited valuations.

His criticism also arrives as some market participants expect SpaceX shares to receive unusually rapid inclusion into major indexes following its eventual public debut. Such inclusion would trigger billions of dollars in automatic purchases by passive funds and ETFs, creating substantial demand regardless of underlying fundamentals.

Some analysts have argued that this dynamic could fuel further gains after listing. Burry’s assessment suggests he views those potential gains as technically driven rather than supported by intrinsic value.

Anthropic Too

His concerns extend beyond SpaceX and into the heart of the artificial intelligence boom. Burry was equally dismissive of Anthropic’s recently announced $965 billion valuation, which places the Claude developer among the most highly valued private technology companies ever created.

“There is no guarantee, and not even a strong likelihood, that Anthropic is long-term worth anywhere near $1 trillion,” Burry wrote.

The warning comes as investors pour unprecedented sums into frontier AI companies. Anthropic recently secured a massive funding round and has become one of the leading competitors to OpenAI, benefiting from surging enterprise adoption of generative AI systems and growing demand for advanced models.

However, Burry believes the economics of the AI industry may ultimately prove less attractive than many investors currently assume.

He argued that developing cutting-edge AI models remains extraordinarily expensive and dependent on massive computing resources, making the business vulnerable to future commoditization.

“Far too expensive, too much brute force,” he wrote, describing the current AI model-development race.

His argument reflects a concern raised by a minority of investors and industry observers: while today’s AI leaders enjoy strong demand, the underlying computing power that fuels AI could eventually become a commodity rather than a source of durable competitive advantage.

Burry suggested the current scramble for AI infrastructure may be sending misleading signals to investors.

“What is happening now is a false demand signal,” he wrote.

That statement directly challenges one of the dominant investment narratives of the past two years. Technology companies have committed hundreds of billions of dollars toward AI infrastructure, data centers, advanced chips, and cloud capacity. Nvidia, AMD, Microsoft, Alphabet, Amazon, and numerous private-equity firms have all expanded spending to secure computing resources.

Burry’s concern is that companies may be overbuilding capacity based on temporary demand conditions rather than sustainable long-term requirements. He warned that the current rush for computing power is driving infrastructure construction and hardware orders that could eventually exceed what the industry actually needs.

Such concerns echo previous technology cycles where investors extrapolated rapid growth indefinitely, only to encounter periods of oversupply and declining returns. The telecom boom of the late 1990s and portions of the cloud-computing buildout during the 2010s offer historical examples where infrastructure investment initially outpaced eventual demand.

The implications of Burry’s critique extend well beyond SpaceX and Anthropic.

His comments arrive as markets are increasingly pricing AI as a transformative force capable of reshaping entire industries. Semiconductor stocks, cloud providers, data-center operators, and software companies have all benefited from investor expectations that AI spending will continue rising for years.

Indeed, many Wall Street firms remain overwhelmingly bullish. Goldman Sachs recently raised its S&P 500 target, arguing that AI infrastructure companies could drive roughly half of the index’s earnings growth. Major private-credit firms are assembling tens of billions of dollars in financing for AI-related projects, while companies such as Anthropic and OpenAI continue attracting capital at unprecedented valuations.

Burry’s stance, therefore, represents one of the clearest counterarguments to the prevailing market consensus.

While he is not predicting the collapse of AI itself, his comments suggest investors may be confusing technological importance with investment value. History has repeatedly shown that groundbreaking technologies can transform economies while still producing disappointing returns for investors who buy at excessive valuations.

China’s semi-annual index rebalancing, set to take effect later this month, is expected to trigger an estimated $48 billion in two-way passive investment flows, according to Goldman Sachs, as major benchmarks adjust their constituents to better reflect the country’s evolving economic priorities and strategic industries.

The adjustments, announced after the market close on Friday by the China Securities Index Co and the Shenzhen Securities Information Co, will reshape influential indexes including the large-cap CSI 300, mid-cap CSI 500, small-cap CSI 1000, SSE 50, SSE 180, STAR 50, Shenzhen Component Index, ChiNext Index, Shenzhen 100 Index, and ChiNext 50 Index. Changes to the CSI series will be implemented at the close of trading on June 12, while Shenzhen index adjustments take effect on June 15.

Goldman Sachs described the scale of the rebalancing in a note saying: “Overall, we expect the major CSI and CNI index rebalancing to generate over $48 billion in gross two-way passive flows.”

This substantial capital movement highlights the growing influence of passive investing in China’s equity markets, where index funds and ETFs increasingly drive trading volumes and stock performance. The rebalancing is not merely technical; it carries strategic weight, as China Securities Index Co stated the changes are designed to better align benchmarks with national development priorities, including advanced manufacturing, technology self-sufficiency, and high-quality growth sectors.

Winners and Losers in the Rebalancing

Stocks expected to see significant net inflows include companies in high-tech and strategic sectors. Goldman highlighted potential beneficiaries such as Huagong Tech Co, Yuanjie Semiconductor Technology Co, and Hua Hong Semiconductor Ltd. Other notable names poised for gains include GigaDevice, VeriSilicon, Piotech, and Zhejiang Century Huatong.

Conversely, stocks facing the largest passive outflows due to deletions or reduced weighting include Beijing-Shanghai High Speed Railway, Hengtong Optic-Electric Co, Shaanxi Coal, and Haier Smart Home Co.

The adjustments are expected to meaningfully increase the representation of information technology, telecommunications, and industrial companies within the major indexes. This shift aligns with Beijing’s broader industrial policy push toward technological independence, semiconductor advancement, and high-end manufacturing — areas that have received strong state support amid U.S.-China tensions and supply chain security concerns.

This rebalancing occurs at a sensitive time for Chinese equities. After a period of volatility driven by regulatory tightening, property sector woes, and global trade frictions, the index changes signal a continued official emphasis on “new productive forces” — Beijing’s term for innovation-driven, high-tech industries.

By tilting benchmarks toward these sectors, the adjustments could attract more domestic and international passive capital into strategically important areas, potentially supporting valuations and liquidity.

For foreign investors, particularly those tracking MSCI or FTSE Russell indexes that often mirror or overlap with domestic benchmarks, the changes could influence fund flows into China. Analysts note that the $48 billion estimate from Goldman underscores the mechanical power of passive investing: as assets under management in China-focused ETFs and index funds grow, rebalancing events increasingly move markets independently of company fundamentals.

The move also reflects China’s efforts to deepen its capital markets and improve their efficiency in allocating resources toward national priorities. In recent years, Chinese authorities have encouraged greater integration between the stock market and industrial policy, using index composition as one tool to guide capital toward semiconductors, new energy, advanced materials, and other key sectors.

However, the rebalancing is not without risks. Stocks deleted from major indexes often experience sustained selling pressure from passive funds, potentially amplifying volatility in affected names. On the other hand, additions can create short-term momentum but may face challenges if underlying fundamentals do not support the increased attention.

As the adjustments take effect in mid-June, market participants are expected to closely monitor trading volumes, liquidity shifts, and any signs of front-running or positioning ahead of the changes. The event could provide a near-term catalyst for technology and industrial stocks, particularly those aligned with China’s self-reliance agenda in semiconductors and high-end manufacturing.

For global investors, analysts believe the rebalancing underpins the unique dynamics in China’s equity markets, where policy direction, index mechanics, and state priorities often play as significant a role as traditional company fundamentals. The $48 billion highlights the scale of passive capital at work and its potential to influence sentiment and pricing in key sectors.