Investor Michael Burry endorsed Ken Griffin's assessment that excess graphics processing unit (GPU) capacity will drive GPU prices lower. Griffin is Citadel LLC's founder, CEO and co-chief investment officer. Burry responded on X on Monday to a post presenting Griffin's pessimistic assessment of AI GPU supply. Burry wrote, "This is obvious to most with a working brain cell."
The post included footage of Griffin speaking at the Future of Global Markets conference on Oct. 21. Griffin compared GPUs with airlines, saying both have very low marginal operating costs. Griffin said excess capacity would cause prices to fall sharply. Griffin also said investors are almost certainly experiencing an AI bubble. Griffin argued that radical economic transformations generally occur alongside bubbles. Griffin said corporate America is examining expenses and assessing how to obtain the greatest return from AI spending.
Burry's comments followed recent publications warning that the broader market was overvalued. Burry shared a Substack analysis on X on Oct. 18 that examined the S&P 500 after the index reached a record on Oct. 6. Burry divided S&P 500 constituents into categories named "Leaders," "Broken" and "Busted." Burry classified stocks trading 20% to 40% below their peaks as "Broken." Burry classified stocks trading more than 40% below their peaks as "Busted." Burry suggested that severely depressed stocks could offer a reasonable refuge during a bear market, even one lasting years. Burry argued that speculation had displaced investing and that stock indices looked excessively extended. Burry warned investors to prepare for another possible 15-20 year stretch of negative or minimal inflation-adjusted stock returns.
The S&P 500 has risen 11.16% year-to-date. The Nasdaq Composite has gained 11.70% year-to-date. The Dow Jones has advanced 7.92% year-to-date.
The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, fell 0.52% on Friday to close at $759.97. The Invesco QQQ Trust ETF (QQQ), which tracks the Nasdaq-100, slipped 0.01% on Friday to close at $704.40. The State Street SPDR Dow Jones Industrial Average ETF Trust (DIA), which tracks the Dow, closed Friday at $521.37, down 1.24%.
Michael Burry Backs Ken Griffin's AI GPU Overcapacity Warning
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Summary
Michael Burry backed Ken Griffin’s warning on AI GPU overcapacity, calling it “obvious to most with a working brain cell.” Griffin, Citadel founder, compared GPU supply to airlines, citing low marginal costs and a possible AI bubble. Burry also shared a Substack analysis splitting S&P 500 stocks into “Leaders,” “Broken,” and “Busted,” hinting at a long-term bear market. Altcoins to watch may face pressure as fear and greed index signals growing uncertainty.
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