Michael Burry says AI bubble could burst within a year, swaps shorts for puts
In brief
- Michael Burry says a serious AI correction could arrive in as little as one year.
- Burry swapped direct Micron and Nebius shorts for puts expiring June and September 2027.
- Micron puts reportedly carry a strike around $500; SOXX positions sit in the low $400s.
- Burry cited an Ares Management report on debt-financed data center spending.
What Burry is betting on
Burry had already opened short positions in Nebius, Micron and Oracle in 2026, per Crypto Briefing. That's changed. He's since moved the Micron and Nebius bets into put options (contracts expiring in June and September 2027), according to his posts as reported by the outlet.
The strikes are specific. His Micron puts carry a strike of around $500, while his positions on the SOXX semiconductor ETF sit at strikes in the low $400s, Crypto Briefing reported. SOXX is an exchange-traded fund that tracks a basket of chip stocks, so betting against it is a bet on the whole semiconductor sector (not just one name).
Burry also called out Nvidia, Palantir and Oracle as players in the AI trade he views skeptically.
He described himself as “more confident than ever” that an AI bubble downturn will play out within a year
Debt, data centers and DDR4
Burry pointed to a report from Ares Management as a key factor in his decision. The report looked at the large investment going into AI data infrastructure, and much of that data center capital spending is financed with debt, according to the material Burry highlighted. He's framing excessive capital spending across the sector as the core of his case.
He also leaned on comments from Acer's CEO that memory supply is reaching equilibrium, particularly in DDR4. Crypto Briefing said that observation ties directly to Micron, which it called one of the companies most exposed to memory pricing.
The timing problem
Options expire.
Crypto Briefing's analysis said the move from open-ended shorts to defined-risk options suggests even a committed bear is respecting how stubborn the AI rally has been. It also flagged the obvious risk in the structure: the puts run out in June and September 2027, and a correction that arrives after those dates wouldn't save the position.
The bubble call itself is Burry's opinion, laid out in his own posts. It's a view on direction and on timing, and the second part is what the 2027 expiries will test.
Frequently asked questions
Why does Michael Burry think the AI bubble will burst?
Burry cited excessive capital spending across the AI sector and an Ares Management report on large investment in AI data infrastructure. According to material he highlighted, much of that data center spending is financed with debt. He also pointed to Acer's CEO saying memory supply is reaching equilibrium, particularly in DDR4.
What is the risk in Burry's put options trade?
Crypto Briefing noted that timing is the main risk. Burry's puts on Micron and Nebius expire in June and September 2027, and a correction that arrives later than that would not save the position.
