As more companies buy into the AI \u201ctokenmaxxing\u201d craze, Michael Burry is becoming more bearish.<\/p>\n
The famed \u201cBig Short\u201d investor recently suggested that tokenmaxxing \u2014 where companies try to maximize their AI tools based on the total tokens they process \u2014 is less about genuine demand and more about saving face in the heated artificial intelligence race.<\/p>\n
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As Business Insider reported, Burry described tokenmaxxing as a \u201ccrazy, rushed, temporary phase (1)\u201d that\u2019s purely \u201cquota-driven, leaderboard-driven, management-mandated overconsumption.\u201d<\/p>\n
According to Burry, tokenmaxxing is only happening because executives treat AI usage as proof of productivity and innovation. Supposedly, the more tokens a company blows through, the more it can tell investors it\u2019s all in on AI, even if the actual business payoff is questionable at best.<\/p>\n
These critiques are consistent with Burry\u2019s prior comments published on CNBC, where he argued today\u2019s AI boom is getting more and more similar to the late 1990s \u201cdot-com bubble<\/a>.\u201d<\/p>\n One AI company that Burry believes will fall big time is mega-cap chipmaker Nvidia [NASDAQ:NVDA]. From a technical perspective, Burry claims trading activity for Nvidia is the \u201clowest since 1999 (1),\u201d which he thinks will make it harder to attract buyers on any signs of weakness.<\/p>\n And, judging by recent fundamental data, it wouldn\u2019t take much in Burry\u2019s opinion for Nvidia to falter. That\u2019s because the bulk of its money is linked to just three clients. Business Insider reported that 64% of Nvidia\u2019s accounts receivable come from three companies, up from 56% last quarter.<\/p>\n If there\u2019s any shakiness in client demand, Burry believes Nvidia will feel it the worst, and that could be the domino that brings the data center driven rally down. Burry is also putting his money where his mouth is. His firm, Scion Asset Management, has purchased put options on 1,000,000 Nvidia shares<\/a>.<\/p>\n The economics of AI hype <\/p>\n Whether sustainable or not, tokenmaxxing is a real obsession for some of the most powerful companies in the world.<\/p>\n For instance, Business Insider reports that JP Morgan and Disney now have \u201cleaderboards\u201d specifically for tokenmaxxing stats. Visa also said it upped its AI usage from one trillion tokens this February to two trillion one month later (2).<\/p>\n Story Continues <\/p>\n But for Big Tech companies, two trillion tokens is child\u2019s play. According to Google\u2019s CEO Sundar Pichai, monthly AI token processing is now at a mind-boggling 3.2 quadrillion tokens, roughly seven times higher (3) than a year earlier.<\/p>\n The theory is that higher token consumption means employees must be more productive since they\u2019re using AI more aggressively. But for critics like Burry, the number of tokens companies use is more about status and internal rankings than an actual revenue booster.<\/p>\n So, is there any data to back up Burry\u2019s claim? With so many big companies spending so much on AI tokens, they can\u2019t all be delusional, right?<\/p>\n Read More: Taxes are going to change under Trump\u2019s \u2018big beautiful bill\u2019 \u2014 4 reasons you can\u2019t afford to waste time<\/a><\/p>\n More tokens may not mean more dollars <\/p>\n It\u2019s not just bearish investors that are questioning the tokenmaxxing trend, as even a few members of Silicon Valley\u2019s upper echelon aren\u2019t entirely sold on spending more and more on AI tokens.<\/p>\n For example, Uber\u2019s COO Andrew Macdonald said he isn\u2019t seeing the \u201clink\u201d between spending more on tokens and better profitability. As Macdonald said in a Business Insider report (4), \u201cI think maybe implicitly there is more that is getting shipped, but it\u2019s very hard to draw a line between one of those stats and, \u2018Okay, now we\u2019re actually producing 25% more useful consumer features (4).\u2019\u201d<\/p>\n Some preliminary data backs up these more critical comments on tokenmaxxing. For instance, the engineering analytics platform Jellyfish analyzed data from 12,000 software developers in Q1 2026 and found that the heaviest AI users consumed about 10 times more AI tokens than average users, but they only produced roughly twice as much work (5).<\/p>\n Granted, that\u2019s a higher output, but it\u2019s hard to justify the costs. Jellyfish noted that a typical developer spends about $52 on AI tokens per month. As for heavy tokenmaxxing users, they were burning through roughly $691 per month in AI costs alone.<\/p>\n Even more striking, the cost per completed code contribution jumped from just 28 cents for low AI users to about $89 for the heaviest users (5).<\/p>\n What all this suggests is that companies are paying dramatically more for a relatively modest productivity boost. Whether that will lead to an AI market apocalypse is debatable, but tokenmaxxing may cool off as companies take a fresh look at their bottom lines.<\/p>\n You May Also Like <\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/p>\n Article Sources <\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>.<\/p>\n Business Insider (1)<\/a>, (2)<\/a>, (4)<\/a>; Google (3)<\/a>; Jellyfish (5).<\/a><\/p>\n This article originally appeared on Moneywise.com<\/a> under the title: Michael Burry calls AI tokenmaxxing ‘crazy, rushed, temporary’ \u2014 and he’s shorting Nvidia to prove it<\/a><\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"As more companies buy into the AI \u201ctokenmaxxing\u201d craze, Michael Burry is becoming more bearish. 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