Michael Burry Establishes Shorts on Nvidia, Tesla, and Semiconductor ETF, Warns of AI Investment Contradictions

According to Business Insider, Michael Burry, the investor known as the basis of "The Big Short," recently established short positions in Nvidia (NVDA-US), Tesla (TSLA-US), and the Semiconductor ETF (SOXX-US). In a July 9 Substack post, Burry warned of fundamental contradictions in AI investments, stating that hyperscale cloud service providers claim permanent demand growth while simultaneously indicating that massive capital expenditure will last only 3 to 4 years—two incompatible positions existing simultaneously.

Burry argued that Nvidia requires endless AI chip demand cycles to sustain its high prices, but once AI computing bottlenecks are resolved, revenue repetition probability will decline and margin pressure will intensify. He also noted that cloud service providers face significant free cash flow pressure, with accounting profits partly supported by extended depreciation periods. Burry dismissed market expectations of a "third door" scenario—where AI demand expands infinitely while capital spending declines—stating clearly: "There is no third door."