One of America’s biggest investor Michael Burry has warned the country on Nvidia. Michael Burry is the same investor who hit headlines with his correct prediction on 2008 housing crisis in the US and the ensuing global economic slowdown. According to Burry, China’s rapidly accelerating power-generation buildout gives it a structural edge in artificial intelligence race if the industry continues relying on increasingly energy-intensive chips. Burry said that Nvidia has a “death grip” on AI development in the US, citing its extensive investments and agreements with many major AI companies and startups.In a series of posts on X, formerly Twitter, Burry said that America is on the wrong path if its AI strategy continues to rely on increasingly energy-intensive Nvidia Corp chips. “Power hungry Nvidia chips are not the way forward,” he wrote. He shared a chart that showed China’s installed electricity generation capacity that has surged far beyond that of America and Europe since the early 2000s. “It is not just the total power advantage,” Burry wrote. “It is the slope.”
Why Nvidia, according to Michael Burry, is hurting America
Michael Burry shared ‘Why China will win AI in one chart’. He wrote: Power hungry Nvidia chips are not the way forward for the US. It is not just the total power advantage. It is the slope. In a follow-up post, Burry argued that Nvidia’s dominant role in AI computing across the US has locked the industry into a path of higher power consumption. “Nvidia’s development roadmap is essentially a power consumption roadmap,” he stated, adding that innovation has increasingly become about “how to power and to cool bigger, hotter silicon.” He said that efficiency improvements have failed to keep pace with the sheer growth in computing being deployed, pushing electricity needs ever higher.Burry contrasted this to China’s infrastructure push. “U.S. transmission grid development is actually decelerating due to permitting issues, while China is building transmission at will to match power output,” he said.That mismatch, he warned, leaves U.S. companies investing heavily in an AI arms race they are “structurally positioned to lose” if power-hungry scaling remains the dominant strategy.Burry said that the U.S. must pivot away from brute-force approaches centered on massive data centers and instead focus on more efficient designs. “The U.S. needs to get away from bigger and bigger power-hungry chips and innovate with AI-tuned ASICs like nobody’s business,” he wrote.
Michael Burry is betting against AI
In its quarterly 13-F filing released in November, Burry’s Scion Asset Management revealed that it has acquired put options, which secure the right to sell an asset at a given price by a certain date, on a pair of AI heavyweights: Nvidia (NVDA) and Palantir (PLTR). According to the filing, Scion now owns the right to sell 5 million Palantir shares and 1 million Nvidia shares, which at the time of filing had a combined value of just shy of $1.1 billion.Responding to the news in an interview to CNBC, Palantir CEO Alex Karp called the idea of shorting Palantir and Nvidia “bats— crazy,” as they are two of the only companies “making all the money” in the AI sector. “Alex Karp blasts ‘Big Short’ investor Michael Burry as ‘bats— crazy’ for bets against Palantir, Nvidia.” Karp said that those engaging in shorts of Palantir, like Burry, may be engaging in “market manipulation.“
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