Michael Burry, the famed investor who predicted the 2008 subprime mortgage crisis, has once again issued a sharp warning against the AI boom. On August 12, Burry revealed his latest portfolio adjustments via Substack, increasing his short position in NEBIUS (NBIS.US) after its stock surged 34% following earnings, labeling the AI cloud provider the "epitome of a boom peak." Concurrently, he expanded his bearish bets against Micron Technology (MU.US), Oracle (ORCL.US), and the iShares Semiconductor ETF (SOXX).
Burry was particularly critical of Nebius, directly calling the AI cloud infrastructure company "exactly the typical picture of a boom top." He described the current pricing structure of the AI infrastructure market as "backwardation"—where short-term computing power costs double the price of long-term contracts—a phenomenon he argues reveals the brutal reality of rapidly depreciating GPU value.
Contrarian Accumulation: Doubling Down on Shorts Amid a 34% Surge
The most notable move in this round of trading was the increased short position in NEBIUS. This AI cloud services provider, spun off from Russian internet giant Yandex and headquartered in Amsterdam, reported its fiscal second-quarter 2026 earnings on August 12. Fueled by explosive demand for AI infrastructure, its quarterly revenue surged 454% year-over-year to $582.3 million, exceeding market expectations. Following the earnings release, NEBIUS shares skyrocketed 34% in a single day. However, this impressive performance did not sway Burry's bearish stance. He announced on Substack that same day that he had increased his short position in NEBIUS at a price of $247 per share.
Burry's disclosed short-selling operations covered both individual stocks and industry indices. For NEBIUS, he added to the short position at $247 per share. For Micron Technology, he increased the short position at $924 per share. For Oracle, he expanded the short exposure at $152 per share. For the iShares Semiconductor ETF, he increased holdings of put options expiring in March 2027, with strike prices concentrated in the $400 range. Just a week earlier, on August 6, Burry had first disclosed short positions in NEBIUS and Oracle, with the short price for NEBIUS at approximately $212 and Oracle at around $145. This double dose of short additions within a week demonstrates a firm conviction about the valuation bubble in the AI infrastructure sector. As of August 13, short interest in NEBIUS accounted for 28.8% of its float, making it one of the most shorted AI infrastructure targets in the market. The stock had gained over 209% year-to-date.
Long Positions: 'Safe Havens' in Latin American E-commerce and Animal Health
While going all-in on shorting AI, Burry simultaneously increased two long positions. He added to MercadoLibre (MELI.US) at $1,850 per share, stating "no further explanation needed, very bullish." He also increased holdings in Zoetis (ZTS.US) at $73.60 per share, with an equally concise and firm evaluation. These two trades reveal Burry's investment logic: anticipating a potential AI bubble burst, he is allocating capital to 'safe haven' assets with solid fundamentals, unaffected by the AI capital expenditure cycle. MercadoLibre, a leader in Latin American e-commerce and fintech, and Zoetis, a global leader in animal health, both possess stable cash flows and clear growth prospects.
Nebius's 'Backwardation' Warning: Short-Term Computing Power Premiums Double, GPUs are Depreciating
Burry's bearish thesis on NEBIUS is based on a deep analysis of its earnings conference call content, questioning the sustainability of its business model and economic substance. First, Burry pointed out the 'backwardation' structure in AI computing power pricing. In its August 12 earnings report, NEBIUS disclosed an extreme 'short-term premium' in its AI computing contract pricing: short-term contracts (under 1 year) cost $40 million to $50 million, sometimes higher, per megawatt, while medium-term contracts (1-3 years) cost $20 million to $25 million per megawatt. Short-term prices are nearly double the medium-term ones. Burry sharply questioned, "Paying double the price for urgency and convenience? This is extreme urgency." In commodity markets, this phenomenon of current prices being much higher than future prices is called backwardation, typically signaling an expectation of rapid value decline. Applying this logic to the AI computing market, Burry noted, "Electricity itself doesn't depreciate. So, either the GPU is depreciating, or the customer is depreciating, or more likely, both are depreciating."
Second, Burry further criticized NEBIUS for extending server depreciation from 4 years to 5 years. He pointed out that the company's contract pricing suggests its computing assets depreciate about 50% annually, yet on the financial statements, it 'slowly amortizes costs, creating an illusion of immediate profit inflation' by extending the depreciation period. He implied this practice may be glossing over profitability, as the actual replacement cycle for AI infrastructure hardware is much faster than its book depreciation schedule. Additionally, Burry once again warned about the huge off-balance-sheet liabilities in the industry. In a Substack post a week earlier, he wrote, "The fish have been feasting on off-balance-sheet liabilities, backup commitments, unstarted leases, and purchase commitments. They have become very fat, very large, and easy targets."
Oracle's Hidden Worries: A Debt-Driven AI Infrastructure Gamble
Burry's bearish thesis on Oracle follows the same logic as his criticism of NEBIUS. He has previously warned that Oracle, by underestimating GPU depreciation, risks overstating its earnings by 26% to 27% by 2028. This expansion of his short position in Oracle comes as the company is caught in a 'layoff-debt' spiral due to its aggressive AI infrastructure investment strategy—having laid off about 21,000 employees in fiscal 2026, while its debt load has climbed to $129.5 billion. Oracle's predicament precisely confirms Burry's core concern: when hardware depreciation far exceeds the rate the company acknowledges, the gap between reported earnings and economic reality will widen dramatically.
A Deeper Warning: NVIDIA's '$500 Billion Circular Financing'
Burry's short-selling layout is not an isolated action. He has previously issued a stern warning about the $500 billion AI infrastructure financing platform launched by NVIDIA (NVDA.US) in collaboration with six major Wall Street financial institutions. Burry termed this model a 'Wall Street stunt,' arguing it essentially uses private credit, asset-backed debt, and NVIDIA's own capital to fund the purchase of NVIDIA GPUs, creating a 'money from left pocket to right pocket' closed loop. He warned that this leveraged financing system, built on GPU demand, is replaying the risk model seen before the 2008 financial crisis. He wrote on Substack, "New boss, same as the old boss."
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