Michael Burry Warns AI Bubble Is Unavoidably Bursting, Too Large to Rescue

Michael Burry, the real-life figure behind the film "The Big Short," has issued a stark warning that the artificial intelligence boom is heading toward systemic collapse, with no government intervention able to prevent it. Speaking on January 21, 2026, Burry labeled current AI investment trends as a "mania" destined to fail from a mathematical standpoint. He cited data from investor George Noble showing OpenAI lost $12 billion in a single quarter. Deutsche Bank estimates OpenAI’s cumulative negative cash flow could reach $143 billion before profitability. Daily spending on OpenAI’s Sora video model exceeds $15 million. Burry emphasized that gains are now subject to severe diminishing returns: doubling model performance now requires five times the energy and capital. The industry faces an insurmountable economic hurdle, he said, making a bubble burst not a matter of if, but when.