“The Big Short” investor Michael Burry and legendary investor Paul Tudor Jones jointly warn: AI frenzy bears a striking resemblance to the eve of the 2000 crash.
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“The Big Short” investor Michael Burry and legendary investor Paul Tudor Jones jointly warn: AI frenzy bears a striking resemblance to the eve of the 2000 crash.
Michael Burry, who gained fame for predicting the housing market crash, has compared the current AI obsession to the final days before the dot-com bubble burst.
Navigating Web3 tides with focused insightsSource: JINSHI Data
Michael Burry—the investor famously portrayed as the “Big Short” for predicting the U.S. housing market collapse—has issued a warning that the stock market’s current obsession with artificial intelligence is beginning to resemble the final phase before the dot-com bubble burst.
In an article published last Friday on Substack, Burry wrote that while driving long distances, he had been listening to financial TV and radio programs and felt that “everyone was talking about AI endlessly—no one discussed anything else all day.”
The investor, best known for successfully predicting the U.S. real estate crash, stated that the stock market has ceased reacting logically or meaningfully to economic data such as employment reports or consumer confidence indicators.
Last Friday, the S&P 500 index hit a new all-time high—not because of the record-low consumer confidence index, but because traders focused instead on the April nonfarm payroll report, which slightly exceeded expectations.
Yet Burry wrote that stocks rose or fell not due to employment or consumer confidence, but simply “because they’ve been rising in a straight line, driven by nothing more than a two-letter thesis everyone thinks they understand… It feels like the final months of the 1999–2000 bubble.”
Burry compared the recent performance of the Philadelphia Semiconductor Index (SOX) to the surge in tech stocks just before the March 2000 crash. The SOX rose over 10% last week alone, bringing its year-to-date gain in 2026 to 65%.
Burry made these remarks amid a massive investor influx into AI-related stocks over the past two years—propelling major U.S. indices to repeated record highs. Semiconductor firms and mega-cap technology stocks tied to AI infrastructure and software have led this rally, with soaring valuations fueled by enthusiasm for generative AI.
Paul Tudor Jones—the legendary macro trader, founder and chief investment officer of Tudor Investment Corporation—also likened the current AI-driven rally to the period preceding the dot-com bust, though he believes this bull market still has room to run.
Speaking on CNBC’s “Squawk Box,” Jones said, “The current environment feels like 1999—about a year before tech stocks peaked in early 2000—and I estimate this rally could persist for another one or two years.”
At the same time, Jones warned that if valuations continue expanding, the eventual correction could be extremely sharp.
Jones added: “Imagine the stock market rises another 40%. At that point, the ratio of total market capitalization to GDP could reach a staggering 300% or even 350%. Everyone knows deep down that some jaw-dropping correction would inevitably follow.”
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