Welcome to Sunday lista weekly CryptoSlate feature featuring in-depth interviews, expert analysis, and thought-provoking editorials that go beyond the headlines to explore the ideas and voices shaping the future of cryptocurrencies.
Michael Burry, the “Big Short” star whose bet against the subprime bubble made him a living legend, is back in the business of organizing marches. This time, instead of subprime debt, he has his sights set on Silicon Valley, specifically the AI bubble that he believes is about to burst.
This week, Puri’s hedge fund disclosed a huge sum $1.1 billion Positioning options against AI giants Nvidia and Palantir. For those less versed in Wall Street parlance, this means Perry is betting that stocks will collapse.
Why is this important? Because when Michael Burry thinks there’s a bubble, people listen (if not for the investment advice, at least for the entertainment value). After all, for every housing market in Cassandra, there are a hundred little chickens. But Puri is no stranger to talking about ridiculous market exuberance (and bankrolling while doing so).
‘Crazy bats***’ versus multi-billion dollar bets: A Palantir perspective
Enter Alex Karp, CEO of Palantir, wielding a verbal flamethrower. Karp’s response to Perry’s big bet? The idea of anyone selling AI companies is completely ridiculous. he to reply:
“The two companies he’s shorting are the ones making all the money, which is very strange.”
He did not stop there, but doubled:
“The idea that chips and ontologies are what you want to shortchange is crazy… It actually shortchanges AI.”
Palantir’s numbers support a certain amount of bravado. The company upgraded its full-year revenue forecast after a record third quarter and posted gains of 173% over the past year.
However, Wall Street’s obsession with AI is a double-edged sword, and even as Palantir beats expectations, its stock price could fall 8% to 10% in the blink of an eye, all thanks to valuation jitters and the specter of the “AI bubble problem.”
Nvidia cycle: virtuous or sticky?
As for Nvidia, CEO Jensen Huang had his own view, playing down investors’ concerns.
“I don’t think we live in an AI bubble,” Huang said He confirmed In an interview with Bloomberg TV, immediately after announcing a slew of new partnerships and the company’s expectations of achieving half a trillion dollars in revenue.
Huang isn’t bothered by the bubble talk. He’s too busy selling the world’s hottest chips and planning a multi-trillion-dollar industry. Nvidia’s CEO believes that the United States is not doing enough to develop artificial intelligence, and that its restrictive policy towards China will ultimately harm the world’s number one superpower. He is sorry He said Journalists at the Financial Times Future of AI Summit on Wednesday:
“China will win the AI race… We need to be in China to win its developers. A policy that causes America to lose half of the world’s AI developers is not helpful in the long run; it hurts us more.”
However, if you take a peek, you’ll find that Nvidia stock (which is up over 50% this year) fell 3-4% intraday on November 4, on news of Burry’s sale.
Some investors remain nervous, especially given looming restrictions on US chip exports to China and the trillion-dollar question: Is the momentum fueled by massive valuations, or is it real demand?
AI bubble mania meets reality: trillions on the table, activated everywhere
Let’s zoom out. Nvidia just became the world’s first valuable technology company 5 trillion dollars. This is larger than all the banks in the United States and Canada combined. The “Magnificent Seven” technology stocks (including Nvidia) now account for 35% of the total market capitalization of the S&P 500.
Investment in AI has soared to over $1 trillion annually, while consumer stocks like Kraft Heinz have taken a huge hit. As an expert in global capital markets, Al Qubaisi’s message, He pointed out:
“There are two American economies: rich versus poor, and AI is the lifeblood of all of that.”
Car repossessions are on the rise. Wage growth is stalled. Americans are carrying record levels of credit card debt, with interest rates hovering near historic highs. Unless the impact of artificial intelligence and data centers is factored in, America’s real economic growth is barely faltering, at just 0.01% according to Harvard economist Jason Furman.
Meanwhile, Wall Street’s top performers are running laps around Main Street, which is still struggling to catch its breath. The gap between winner-take-all technology stocks and everyday households paints a very stark picture of today’s economy. If the AI bubble bursts, it will hit like Tyson’s left hook.
Macro analyst and Goldbug Peter Schiff, who never misses an opportunity to dive into Bitcoin, is just as pessimistic as ever. Not only does he think cryptocurrencies are about to explode, he actually is there With Perry on AI:
“The losses to bitcoin holders and crypto investors will be staggering. More money will be lost in this bubble than was lost when the dot-com bubble burst. But if this indicates a general risk aversion, be wary of a larger AI bubble bursting.”
However, the harshest critic of the moment is Puri himself, who is betting 80% of his investment portfolio on the AI bubble. he pensive To his fans on Twitter:
“Sometimes, we see bubbles. Sometimes, there’s something to do about it. Sometimes, the only winning move is not to play.”
Technical issues, tension and timing problem
If the scene sounds familiar, that’s because it is. In the dot-com era, no-profit pet food sites became household names, but they crashed harder than a piano falling from a fourth-floor window.
Today, instead of dog.com, it’s the site of chips and data lakes; “Chips and existence,” Karp quips, with RSI readings above 70, a price-to-earnings ratio exceeding 200 for Palantir, and a price-to-book skyrocketing above 69. Nvidia and Palantir are riding a wave of profitability, but also expectations that would make an experienced gambler sweat.
The sell-off that followed Burry’s revelation was real: Palantir shares fell nearly 9%, Nvidia fell more than 3%, and the S&P 500 fell along with tech sector peers Oracle and Tesla. The sell-off bled into cryptocurrencies as well Bitcoin briefly fell below $100,000 currency for the first time since June.
CNBC reported on Karp’s anger, suggesting that Perry’s actions were as much about market manipulation as macro-level pessimism. He got angry:
“I think what’s going on here is market manipulation. We’ve had the best results that anyone has ever seen… I mean, these guys, they claim to be ethical, but you know, they’re actually selling one of the greatest companies in the world.”
Big Tech Bubble or Decade of Dominance?
Meanwhile, Sam Altman, CEO of OpenAI, has publicly admitted that the AI market is likely in a bubble. he He said Correspondents:
“Are we at a point where investors as a whole are overly excited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes… When bubbles happen, smart people get overly excited about the kernel of truth.”
However, he also claimed that bubbles do not kill revolutions, and sometimes give birth to the next economy. Wall Street isn’t sure whether to applaud or cringe. Perry’s shorts made them nervous.
Palantir, despite “other global growth,” now has to achieve 40-50% annual revenue expansion and 50% gross margins just to justify its price. The industry-wide uptick is massive, but a single tweet or loss of revenue can result in tens of billions being lost in minutes.
Final sentence: It’s all ridiculous. Until it isn’t
Perry’s landing, Karp’s bravado, Huang’s anxiety; Discussing the AI bubble is a masterclass in financial melodrama. Are we witnessing the rhythm of history, or is technology simply flexing its muscles in a desperate world in search of new growth engines?
If you trust Burri’s intuition, there’s pain ahead. If you prefer your technology with a stacked side of chips (silicon type), this is probably just the beginning. Karp insisted:
“I think this behavior is scandalous, and I will dance when it is proven wrong.”
In both cases, bubbles do not appear until they burst. Until then, thanks to Michael Burry for keeping the punch bowl high (and the market story never boring).
