Michael Burry, the investor famous for predicting the 2007-2009 housing market crash, has shifted his stance on the artificial intelligence (AI) sector, now betting that the AI bubble could burst sooner than he initially thought. He announced a move to put options on major AI-related stocks, including Micron, Nebius, SOXX semiconductor ETFs, and Palantir, with expirations mostly set for mid-2027. Burry’s strategy focuses on shorter time horizons and increased leverage, which he finds more attractive due to the current low volatility environment.

Burry’s bearish outlook is partly influenced by new research from Ares Management, which highlights the risks tied to the AI boom’s reliance on sustained capital expenditure and unproven revenue streams. According to the report, a single downturn in AI-generated revenue could cause boards to pivot away from AI investments, triggering a potential market decline. Burry’s investment adjustments reflect his growing conviction that such a pivot could happen as early as next summer.

His recent trade adjustments also coincide with comments from industry leaders like Acer CEO Jason Chen, who pointed to cyclical trends returning in the semiconductor memory sector amid increasing production capacity in China. This contradicts earlier narratives of persistent chip shortages and supports Burry’s thesis that the industry may face downward price pressures. Despite Burry’s longstanding bearish stance throughout 2026, key AI and tech stocks have remained resilient, with the Nasdaq Composite hitting record highs even as some individual tech stocks like Micron and Palantir trade below their peaks.

Burry first flagged concerns about the overheated market earlier this year, comparing the current conditions to the late 1999-2000 tech bubble. Now, with the AI sector drawing significant investor attention and capital, he is amplifying his bets against it. His pivot to put options and shortening timelines underscores his urgency and expectation that the AI market’s correction is approaching, potentially reshaping the landscape for AI-focused companies and investors by mid-2027.