Michael Burry estimates the five firms—Amazon, Meta, Alphabet, Microsoft and Oracle—have about $3 trillion in AI-related commitments and exposures, and says write-offs tied to their infrastructure spending could emerge around 2028 or 2029.
Burry compared the spending surge with earlier capital-cycle bubbles, noting that S&P 500 net capital investment has reached 2.07% of GDP—its highest level in roughly 40 years outside the period after the March 2000 Nasdaq peak. He estimated Alphabet’s AI-related off-balance-sheet commitments and exposures at nearly $900 billion and Meta’s uncommenced leases and purchase obligations at roughly $700 billion. Hyperscalers are on track to spend about $800 billion on capital expenditures this year, with annual spending expected to exceed $1 trillion next year.
Burry argues that hyperscalers’ depreciation assumptions could understate industry-wide depreciation by about $176 billion from 2026 to 2028; if those assumptions hold, he estimates Oracle’s and Meta’s 2028 earnings could be overstated by 26.9% and 20.8%. Nvidia disputes his two-to-three-year GPU replacement cycle, saying four to six years is more realistic and its 2020 A100 chips remain in use and revenue-generating. Micron’s chief business officer said memory demand remains well above the company’s ability to supply across nearly every product category through 2028. Burry has short positions in Oracle, Nebius, Micron and Palantir; most of those stocks gained through August.
