Wall Street Guru Doubles Down on Bet Against AI Boom: Why to Increase Short Positions

Michael Burry has once again criticized the boom in artificial intelligence. The investor, known for predicting the collapse of subprime mortgages, has increased his short positions in several companies linked to the current investment cycle in AI and semiconductors.

Among them, he particularly highlights Nebius Group, one of the most bullish stocks of 2026, and on which Burry has made one of his most forceful criticisms.

Burry noted that he increased his short position in Nebius to around $247, while also expanding short positions on Micron, Oracle, and the iShares Semiconductor ETF (SOXX).

Michael Burry is betting against the AI boom again, increasing short positions in companies like Nebius Group.

Conversely, he increased his long positions in Mercado Libre and Zoetis, making it clear that his negative outlook is focused on certain areas related to AI infrastructure and chips.

Burry's Argument on Nebius

The central axis of Burry's analysis points to Nebius's revelations in its recent call with investors regarding contracts for AI computing capacity. Despite having the opportunity to commit its entire offering for 2027 through medium-term contracts (one to three years), the firm chose to retain an operating margin to meet demand with shorter-term agreements.

The reason is purely economic: as the company explained, certain short-term agreements can be negotiated at levels of approximately $40 to $50 million per megawatt, or even higher. This contrasts with the approximately $20 to $25 million per megawatt obtained in medium-duration contracts.

The central axis of Burry's analysis points to Nebius's revelations in its recent call with investors regarding contracts for AI computing capacity.

Why Pay Double for Short-Term Capacity?

Precisely this is where Burry raises alarms: he openly questions the rationality of the business by asking why a client would pay double for a shorter-duration processing capacity contract.

For Burry, such a price difference implies an extraordinarily urgent demand and may reveal something deeper about the future economic value of that infrastructure.

Burry compares the price curve to a state of "backwardation": having capacity today is much more expensive than securing it for the long term. His interpretation revolves around the idea that the market is assuming that some fundamental component of the business will depreciate rapidly.{#p-1786635638692-29752}

GPU or Customer Loss {#p-1786635827904-79103}

Burry focuses on a key question:the energy that powers data centers does not lose value in that way, so the explanation must be found in other parts of the business.{#p-1786635848842-33375}

Burry focuses on a key question:the energy that powers data centers does not lose value in that way, so the explanation must be found in other parts of the business.{#p-1786635848842-33375}

According to his thesis, there could be an accelerated depreciation of GPUs due to rapid technological advancement, a loss of quality or solvency of certain clients, or a combination of both factors.{#p-1786635848842-2155}

Furthermore, this would question one of the central elements of the sector: that the huge outlays for AI infrastructure will generate high returns over sufficiently long periods.{#p-1786635848842-9439}

Accounting Depreciation {#p-1786636080263-95119}

Burry also emphasizes Nebius's decision to extend the depreciation schedule of its servers from four to five years.{#p-1786636130188-7225}

For the investor, there is a clear contradiction between extending the accounting life of assets and simultaneously operating in a market where contract prices seem to indicate a strong loss of economic value of the infrastructure as time goes by.{#p-1786636130188-70109}

The criticism is more than significant after the extraordinary performance of Nebius's stock, whose shares have accumulated a rise of over 200% in 2026.{#p-1786637515943-42576}
Image: Freepik

The criticism is more than significant after the extraordinary performance of Nebius's stock, whose shares have accumulated a rise of over 200% in 2026.{#p-1786636130188-98471}

Burry Expands His Short Positions in AI {#p-1786636307212-59647}

The investor's position on Nebius is part of a broader bet. Burry also increased his short positions in Micron and Oracle and raised his put options on the SOXX ETF, expiring in March 2027.{#p-1786636459433-74477}

His analysis logically presents a thesis that is clearly contrary to the dominant consensus: Burry does not necessarily deny the enormous current boom in demand for artificial intelligence, but rather questions the economic duration of the assets, the sustainability of prices, and the valuations that the market is assigning to that demand.{#p-1786636459433-14233}

Burry does not deny the enormous current boom in demand for AI, but questions the economic duration of the assets, the sustainability of prices, and the valuations of the sector.{#p-1786638127977-79437}

The question his thesis raises is not whether there is a boom in AI investment, which is clearly difficult to dispute, but whether future returns will justify the enormous levels of capital invested and the valuations reached by some of the companies most exposed to the cycle.