The economic guru who predicted the subprime mortgage crisis in 2008 issues this warning to U.S. investors

American investor Michael Burry, famed for predicting the 2008 U.S. housing market collapse, is sounding alarms again. This time, he’s concerned about the artificial intelligence boom.

In his first Substack post, published Sunday, Burry compared today’s AI frenzy to the dot-com bubble of the late 1990s, drawing a direct line between Cisco’s role then and Nvidia’s dominance now.

Burry described the current surge in AI investment as evidence that economic booms can be based on little more than excitement and positive impressions.

He wrote: “Folly makes money. Creative destruction and manic folly are exactly why the U.S. is the center of innovation in the world. Companies are allowed to innovate themselves to death. And ever more spring up to do the same. Sometimes the new company is the same company on a pivot.”

He noted that during the dot-com era, the sector revolved around a group of high-profit, large-cap firms dubbed the Four Horsemen: Microsoft, Intel, Dell and Cisco. Today, he claims, the pattern is repeating with Nvidia at the center. The chipmaker, now worth roughly $5 trillion, recently became the world’s most valuable company.

Burry’s warnings carry weight because of his track record. In the early 2000s, he was one of the first to detect structural weaknesses in the U.S. mortgage market. He famously bet against the system by targeting securities backed by subprime loans, an approach that few believed in at the time. When the housing market collapsed, his hedge fund, Scion Capital, earned hundreds of millions, and Burry himself made a personal fortune.

His story was later dramatized in the Oscar-winning 2015 film The Big Short, where he was portrayed by Christian Bale. Now, Burry suggests that investors may once again be ignoring familiar warning signs.

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