{"id":314493,"date":"2026-02-24T09:53:14","date_gmt":"2026-02-24T09:53:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/314493\/"},"modified":"2026-02-24T09:53:14","modified_gmt":"2026-02-24T09:53:14","slug":"americas-biggest-investor-michael-burry-has-an-end-question-for-google-amazon-meta-microsoft-and-other-tech-companies-says-when-does-it","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/314493\/","title":{"rendered":"America’s biggest investor Michael Burry has an ‘End question’ for Google, Amazon, Meta, Microsoft and other tech companies; says: When does it …"},"content":{"rendered":"

\"America'sInvestor Michael Burry is questioning Big Tech’s massive AI spending, highlighting concerns over ballooning debt and accounting practices. Companies are investing hundreds of billions in AI infrastructure, leading to significant borrowing and potential overstatement of earnings. Burry draws parallels to the early electricity boom, where transformative technology didn’t prevent investor losses. Michael Burry, the investor who famously predicted the 2008 financial crisis and shorted the US housing market before it collapsed, has turned his attention to Big Tech’s AI spending binge\u2014and he’s asking a question nobody on Wall Street seems to want to answer: when does it actually stop?In a series of posts on X over the weekend, Burry\u2014who runs Scion Asset Management and goes by the handle Cassandra Unchained\u2014called out Amazon, Google, Meta, Microsoft, Oracle, Nvidia, and Caterpillar by name. His core argument is blunt. These companies are burning through all their cash flow on AI data centres, borrowing money in ways they never have before, and using accounting tricks to mask the damage to their earnings. “It is consuming all your cash flow, you are borrowing, you are financing in ways you never have,” Burry wrote. “But if it scales, when does it end?”<\/p>\n

Big Tech’s combined AI tab has crossed $660 billion\u2014and the debt is piling up<\/p>\n

The numbers back him up. Amazon, Alphabet, Meta, and Microsoft are collectively set to spend roughly $660 billion on AI infrastructure in 2026\u2014a figure that’s 165% higher than what they spent in 2024 and larger, as a share of US GDP, than the Apollo space programme, the interstate highway build-out, and the great railroad expansion of the 1850s. Amazon alone pledged $200 billion, a number so large it’s expected to exceed its own cash from operations for the first time. The company has already filed paperwork signalling it may raise fresh capital through debt.Alphabet is issuing a 100-year century bond\u2014the first by a tech company since IBM in 1996\u2014as part of a $20 billion-plus debt raise across multiple currencies. Its long-term debt has quadrupled to $46.5 billion. Meanwhile, the Stargate AI data centre project\u2014announced with a $500 billion target involving OpenAI, SoftBank, and Oracle\u2014is reportedly stalled, with under $10 billion in secured funding and no major construction underway.Wall Street has not taken this well. Amazon, Google, and Microsoft have shed a combined $900 billion in market value since their earnings calls. Microsoft disclosed that 45% of its $625 billion cloud backlog comes from a single customer\u2014OpenAI\u2014which unnerved analysts. And as Burry pointed out, the combined revenues of Amazon, Apple, Alphabet, Microsoft, Meta, and Nvidia don’t even hit $2 trillion. The gap between what’s coming in and what’s going out explains why leverage is the new normal.<\/p>\n

Burry draws a parallel to the early electricity boom\u2014and that’s not entirely reassuring<\/p>\n

When pushed on whether the AI buildout is just another Cisco-style bubble, Burry offered a more nuanced comparison: electrification in the late 19th and early 20th century. The technology was real, demand was enormous, and the killer app\u2014electric light\u2014was obvious. But as Burry’s own research showed, citing the academic paper “Killing Complaints with Courtesy,” even iconic names like Westinghouse and Edison went through bankruptcies, price wars, and brutal write-downs before the industry stabilised.Countless central power stations went bankrupt within their first four decades. The panics of 1893 and 1907 wiped out many companies, and even Westinghouse Electric itself filed for bankruptcy. Edison, for his part, eventually lost interest entirely, saying he simply wanted dividends from whatever stock he still held. Electricity production surged 280% between 1900 and 1910, and generation capacity grew 375%\u2014but that didn’t save the investors who funded it too early or too aggressively.Google CEO Sundar Pichai, speaking at the India AI Impact Summit 2026 in Delhi, reached for a similar historical comparison\u2014railroad expansion and the US highway system\u2014to justify Alphabet’s spending. But it’s worth noting that just two months earlier, in November, Pichai himself had told the BBC there were “elements of irrationality” in the AI investment boom and drew a direct parallel to the dot-com crash. The pivot from caution to conviction has been swift.<\/p>\n

The depreciation trap: today’s cutting-edge GPU is tomorrow’s write-off<\/p>\n

Then there’s the hardware problem. Nvidia’s own roadmap shows its upcoming Vera Rubin chips delivering roughly 5x the inference performance of current Blackwell GPUs\u2014in just one generational jump. That kind of leap makes a six-year depreciation schedule look like wishful thinking. Microsoft CEO Satya Nadella<\/a> has himself said he doesn’t want to be stuck depreciating one generation of hardware for four to five years.Burry’s analysis estimates that if chip useful life is closer to 2.5 years, cumulative earnings overstatement across the Big Tech cohort could average 32% between 2026 and 2028. Even at 3 years, the average overstatement sits at 18%. Oracle comes out worst in his model, with potential overstatement of 62% at a 2.5-year useful life. These aren’t small rounding errors\u2014they’re the kind of gaps that eventually force large write-downs. And a $50 billion write-off, as Burry noted, might not sound like much against a $3 trillion market cap today\u2014but it will loom a lot larger if that market cap shrinks.Burry isn’t saying AI is fake or that the technology won’t matter. His electrification analogy makes that clear enough. What he’s saying is that the financial engineering around the buildout\u2014the debt, the depreciation schedules, the earnings adjustments\u2014deserves far more scrutiny than it’s getting. The technology was transformational then too. It just didn’t stop the investors from getting wiped out.<\/p>\n","protected":false},"excerpt":{"rendered":"Investor Michael Burry is questioning Big Tech’s massive AI spending, highlighting concerns over ballooning debt and accounting practices.…\n","protected":false},"author":2,"featured_media":314494,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,71123,146944,146942,218,219,146940,57120,61,60,74497,146943,30990,80,146941,15991],"class_list":{"0":"post-314493","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-ai-infrastructure-investment","10":"tag-alphabet-debt-bond","11":"tag-amazon-ai-spending","12":"tag-artificial-intelligence","13":"tag-artificialintelligence","14":"tag-big-tech-ai-spending","15":"tag-google-ceo-sundar-pichai","16":"tag-ie","17":"tag-ireland","18":"tag-michael-burry","19":"tag-nvidia-chip-performance","20":"tag-satya-nadella","21":"tag-technology","22":"tag-technology-bubble","23":"tag-vera-rubin"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/314493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=314493"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/314493\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/314494"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=314493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=314493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=314493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}