Investor Michael Burry has suggested that a sudden stock market crash could be a positive development if it prevented the initial public offerings (IPOs) of OpenAI and Anthropic, two leading artificial intelligence (AI) companies. He argues that these firms could consume billions of dollars in capital without delivering significant results. Burry believes this would be a lesser evil compared to the potential risks of creating a destructive AI system. He has also warned that the massive financing of data center projects through debt is not sustainable, especially with rising interest rates. Burry has placed bets against major companies such as Nvidia and Palantir, which are involved in AI and technology sectors.
OpenAI has delayed its IPO to an unspecified date, while Anthropic continues with its plans to go public. Michael James Burry, a medical doctor and alternative investment manager, founded Scion Capital LLC, which he managed from 2000 to 2008. He is known for his role in the book The Big Short, which detailed his predictions about the 2008 financial crisis, and he is a critic of the current AI industry. His recent comments came as former U.S. President Donald Trump convened AI industry leaders at the White House to discuss a voluntary self-regulation agreement for the sector.
In a post on X (formerly Twitter), Burry stated, "For the good of humanity, the markets should crash abruptly and prevent the IPOs of OpenAI and Anthropic," arguing that these companies would "swallow, then destroy BILLIONS of dollars of capital." This statement follows a surge in AI investments, with OpenAI and Anthropic requiring significant funding to develop advanced AI models and establish the necessary computing infrastructure. An IPO would allow these companies to access larger pools of capital by opening up to a broader range of investors.
Burry has expressed doubts about the ability of massive spending on data centers and AI infrastructure to generate sufficient returns. He suggested that calls by companies like Anthropic and OpenAI to slow down the development of AI technology might be a strategy to build enthusiasm for their IPOs. He also responded to a user's sarcastic comment about crashing the market so that a destructive AI system, like Skynet from the Terminator movies, couldn't go public, saying, "In the same vein."
Sam Altman, CEO of OpenAI, announced the suspension of all IPO plans, stating that the company intends to continue progress in AI but must ensure the safety of its models. This decision came less than 24 hours after OpenAI canceled the release of GPT-6.1 Astra due to a high level of misalignment between the model's behavior and human values. Altman emphasized that waiting too long for an IPO would be "harmful to the world."
Anthropic, OpenAI's main competitor, is preparing for an IPO with a potential valuation of more than 2,000 billion dollars. However, financial data suggest that Dario Amodei's company will record a loss of 42 billion dollars for the 2025 fiscal year and will spend more than 518 billion dollars on cloud, computing, and infrastructure-related obligations. Brain & Company estimates that the global AI industry will need to generate approximately 6,000 billion dollars in annual revenue by 2031 to justify the massive investments in data centers and computing infrastructure. However, current applications and employee productivity will only cover a fraction of this amount. Economist Torsten Slok highlighted a financial imbalance within the AI industry, noting that profits from chip manufacturers are funded by investor capital rather than real revenue. Developers of AI applications show negative operating margins, creating a very fragile business model that relies on "the hope of future profitability."
If end users do not quickly generate concrete returns on investment, the massive funding could abruptly dry up, causing the AI bubble to burst. Some companies are already facing negative cash flow, including OpenAI and Anthropic. Oracle is in a difficult position after accumulating more than 150 billion dollars in AI-related debts and is laying off employees in large numbers.
Investor Warns of AI Industry Risks Amid IPO Delays and Market Concerns
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