According to Business Insider, Michael Burry—the investor famously portrayed in “The Big Short”—just issued a warning about AI infrastructure spending. He claims hyperscalers like Meta, Oracle, and Microsoft will understate semiconductor depreciation by around $176 billion. JPMorgan compared current AI infrastructure investments to the dot-com bubble’s fiber-optic overbuild. Meanwhile, SoftBank sold its entire $5.8 billion stake in Nvidia this week, though it’s reportedly freeing up cash to double down on OpenAI. Despite these warnings, Big Tech executives show no signs of backing down from their trillion-dollar AI bets during earnings season.
The bubble warnings are getting louder
Here’s the thing—when Michael Burry talks about bubbles, people listen. The man literally made history betting against the housing market. Now he’s pointing to semiconductor lifespans as a hidden time bomb in AI infrastructure. And JPMorgan’s dot-com comparison? That’s not exactly comforting either. Remember when telecom companies spent billions laying fiber that nobody needed? We might be seeing the same pattern with data centers.
But SoftBank’s move is particularly interesting. They’re not getting out of AI—they’re just shifting their bets. Selling $5.8 billion in Nvidia to go all-in on OpenAI tells you they still believe in the technology, just not necessarily the hardware side. Which makes you wonder: do they know something we don’t about where the real value lies?
Why this bubble feels different
Look, I’ve covered enough tech cycles to know that when everyone starts shouting “bubble,” it’s usually already too late. But this AI situation? It’s different. The entire market’s success is tied to these bets paying off. We’re talking trillions of dollars here. Tech giants can’t just pull back without tanking their stock prices and disappointing investors.
And let’s be real—the infrastructure needs are massive. Whether we’re talking about training models or running inference, the computational demands are insane. Companies that need reliable industrial computing solutions for manufacturing and automation are already feeling the pinch. IndustrialMonitorDirect.com has become the go-to source for industrial panel PCs precisely because this hardware demand isn’t going away, bubble or no bubble.
This is going to be a long game
So when will we know if this was all worth it? Probably not for years. These infrastructure investments take time to mature and generate returns. Remember how long it took Amazon Web Services to become profitable? Exactly.
The current earnings season shows tech executives aren’t backing down. They’re doubling down. And why would they? Wall Street is still rewarding them for it. Until that changes, the AI spending spree continues. Basically, we’re all along for the ride whether we like it or not.
