Oxford-Cambridge researchers flag ChatGPT's 'big problem'; Michael Burry agrees
A groundbreaking study from Oxford and Cambridge uncovers a pressing issue known as 'model collapse' in large language models. This phenomenon arises when generative AI generates synthetic data, leading to the erosion of distinct human nuances. Investor Michael Burry warns about the risks associated with AI, noting that information could face propagation errors.
Michael Burry, the investor behind the acclaimed film "The Big Short," is expressing greater confidence in an impending AI market downturn in 2027. The "Big Short" investor has placed leveraged bets against AI stocks by using bearish put options. Burry contends that the AI boom is fueled by debt-driven spending that is showing signs of strain.
In a recent Substack post, Burry stated that he is moving timelines up, primarily due to his expectation that the AI bubble may burst sooner than anticipated. He previously believed that his pessimistic outlook would manifest around 2028, but now feels more confident about a timeline in 2027. Burry has shifted his investment strategy, closing his outright short positions and replacing them with put options on various AI-related companies, including Nvidia, Palantir, Micron, Nebius, Oracle, Caterpillar, the iShares Semiconductor ETF, and the Nasdaq 100.
These positions are set to expire between June and December next year, with the expectation of significant declines in these stocks. Burry highlights that AI companies are borrowing and spending excessively to build data centers, leading to unsustainable practices. He warns that rising interest rates could further exacerbate the situation, given the reliance on debt from private equity, private credit, and their insurers for infrastructure buildout.
Despite continued positive sentiment around AI, Burry maintains that the current hype will not last.
Written by urgent.news from Business Insider's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
