DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Millions of Americans who own an S&P 500 index fund are already tied to the AI boom, whether they intended it or not. Those funds hold Nvidia, Oracle, Micron, and Palantir because market value weighting gives the largest companies the greatest influence.

Michael Burry, the investor known for the “Big Short,” has warned that Washington now has a deep interest in keeping that boom alive. In a Substack chat, Burry wrote that President Donald Trump’s team views the AI buildout as the economy’s only genuine engine.

“They cannot afford to let it fall,” Burry added, according to Stocktwits. Yet his own trading posture remains decidedly bearish, revealing a sharp divide between what political leaders may want and what markets may ultimately deliver.

Burry covered short positions in Nvidia, Oracle, Palantir, Nebius, Micron, and CoreWeave on Sept. 28, Stocktwits reported. He replaced the positions in all but CoreWeave with put options, which gain value when the underlying stock falls but eventually expire.

Several of those put options extend into late 2027. “Fundamentally, I am moving timelines up,” Burry wrote while citing weekend research, indicating that his wager focuses on the timing of a potential reckoning as well as its likelihood.

His positions are not necessarily inconsistent with his political assessment. Burry believes Washington wants the AI expansion to continue, but he also argues that the government may lack effective tools to protect it during a financial or debt crisis.

Burry said the federal government is in its weakest position in modern history to confront such a crisis. In his view, the remaining policy remedies are limited and largely blunt, a problem made more pressing by elevated borrowing costs.

Goldman Sachs Research offers a calmer reading of the investment cycle. It expects AI investment to reach roughly 1.8% of U.S. GDP this year, a level it described as sitting “comfortably within the historical range” of previous technology booms.

President Trump’s own accounts sold between $5 million and $25 million each of Microsoft and Amazon shares on July 20, according to a CNBC analysis of his latest disclosure. CNBC said the accounts later repurchased smaller amounts.

The 10 year Treasury yield stood near 5.17% last week, its highest level since 2007, according to CNBC. Higher yields make borrowing more expensive for data center developers and Washington, reinforcing Burry’s concern about the government’s limited options.

A senior private credit investor told CNBC that financing will become more difficult for neoclouds, including GPU rental businesses such as CoreWeave, because they have less financial cushion. Oracle has already shown how nervous that financing market can become.

Oracle issued a force majeure notice warning of possible delays involving Project Jupiter, a New Mexico data center connected to OpenAI. Bankers and investors told Reuters that the notice unsettled lenders throughout the trillion dollar AI infrastructure financing market, although developer Blue Owl said financial commitments remained unchanged.

Analysts nevertheless remain bullish on the five stocks Burry still bets against. S&P Global data compiled by Stock Analysis showed Buy or Strong Buy consensus ratings for all five, even as their financial results and valuations revealed dramatically different risk profiles.

Oracle revenue rose 21.6%, though its market value fell by half in one year. Palantir sales surged 78.9%, but its shares traded around 99 times expected earnings, while Nebius increased sales roughly sixfold to $1.4 billion and recorded net income of $42.4 million.

Nvidia generated $192.9 billion in net income as sales increased 83.4%, while Micron reported sales growth of 167% and traded near seven times expected earnings. Burry has placed his timing bets even though most of his new AI puts expire before the large AI write offs he forecast for 2028 or 2029.

Rothschild & Co Redburn also began coverage of Nebius and CoreWeave with Sell ratings, according to TipRanks. For index fund investors, the danger is that retirement accounts hold both companies with ample cash and builders dependent on borrowing, while a political backstop offers no guarantee that ordinary shareholders will be protected.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.