News about AI bubble

Michael Burry, who made his fortune betting against the U.S. housing market before the 2008 crisis, remains bearish on AI overinvestment even after disbanding Scion Capital. He holds put options on Nvidia, Palantir and Oracle, but so far only the Oracle bet has paid off, while Nvidia and Palantir have not fallen as he expected. Burry argues the market is in denial and propped up by borrowed money, and says this denial phase lasted six to nine months before previous crashes. He has also criticized Nvidia’s chip depreciation math, while buying MercadoLibre and Deckers Outdoor. The author concludes that AI investors should still follow this bear case to maintain an objective view.

The S&P 500 is up 14.0% year to date and hit a record on October 6. Bianco Research says its 41 AI-related companies make up 48.68% of the index's total market cap, led by Nvidia at $5.5 trillion. These companies are spending heavily on infrastructure: Microsoft put $115.95 billion into fiscal 2026 capex, Meta guided to $130–145 billion, and Alphabet's long-term debt rose from $46.5 billion to $98.2 billion while it suspended buybacks. The article compares this concentration to the 19th-century railroad boom, when overbuilding ended in panics, and argues AI safety risks could become index-wide risks. BTIG notes more stocks hit 52-week lows than highs, a pattern it compares to 2000.

A survey of 155 North American family offices by RBC Wealth Management and Campden Wealth found that 85% rank AI as their top investment theme, even though 75% expect an AI bubble to burst within five years. RBC's Bill Ringham said fear of missing out drives a short-term focus: 59% named AI the top theme of 2026, but over the two-to-five-year horizon, 69% favored U.S. equities versus 64% for AI. The most-cited market risks were excessive government borrowing (76%), an AI bubble bursting (75%) and AI advancements affecting employment (66%). Among those planning changes, 31% intend to increase direct investments in private equity, while just over a fifth plan the same for real estate and venture capital.