this post was submitted on 06 Nov 2025
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The Big Short Guy Just Bet $1 Billion That the AI Bubble Pops (futurism.com)
submitted 14 hours ago by tonytins@pawb.social to c/technology@lemmy.world
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[–] echodot@feddit.uk 37 points 6 hours ago (4 children)

The fact that he was even able to make that bet is incredible. How deluded do you have to be to think the AI bubble won't burst? Keeping it going will require in ever-increasing amounts of money to paper over the gaping chasms that keep cropping up, and eventually the amount of money necessary to keep it going will cease to be feasible. Then, after taking gullible investor for all of they've got, the whole thing will fall over in the world's most well deserved and predictable market crash.

The subprime mortgage collapse was inevitable only in hindsight, you had to have a good understanding of the market to see it in advance. To see the level of corruption and false promises that have to be made in order to make the mortgage bubble possible. But everyone can see the AI BS right out in the open, I'm not talking about the "how many Rs are in strawberry" questions either, I can sort of see why that's not really a fair question. I'm talking about the fact that every single business that has ever tried to replace its employees with AI, has always failed, and failed almost immediately. Even Amazon couldn't make it work.

[–] silasmariner@programming.dev 20 points 4 hours ago (1 children)

I think the idea is that, whilst shorting, you get squeezed. The question is not 'if' but 'when' and if it takes too long and you're $1B deep you can lose your shirt

[–] DragonTypeWyvern@midwest.social 2 points 2 hours ago (1 children)

Yep. The market can stay irrational etc

The thing is though as long as it goes down that's usually all you need. You don't need a total collapse.

[–] sugar_in_your_tea@sh.itjust.works 1 points 2 hours ago

That's the thing though, options are generally relatively short in duration, with most being a few months. The longest options are around 1-2 years out.

Could AI stay keep its hype for 1-2 years? Probably. Will it? Who knows!

[–] rekabis@lemmy.ca 8 points 4 hours ago* (last edited 4 hours ago) (3 children)

everyone can see the AI BS right out in the open

To me it is four things in particular:

  1. How AI use erodes skills in the subject AI is being used to assist in. This is a 100% occurrence, and has been demonstrated across all industries from software developers to radiologists. Most experience a 10-20% erosion in their skill set within the first 12 months of AI use, but others in the study groups have seen up to a 40% erosion in their skill sets.
  2. How AI use shuts down critical thinking, and makes users more stupid. This is a 100% occurrence, and has been clearly demonstrated by MRI scans of the prefrontal cortex while users are actively using AI.
  3. How AI use makes the user slower. This is the only user point that is not 100%, as only less than 2% of the most senior and skilled users show a slight increase in work completed… after more than 12 months of using AI. Projections have been made on the other 98%, and over 90% of them will never work faster with AI than without it, regardless of training or experience.
  4. The gratuitous hallucinations, which are only increasing in scope and severity with every AI generation. It arises entirely from the constraints the AI are rewarded with - providing no answer is weighted just as negatively as a wrong answer - and anywhere from 60-80% of all responses are hallucinatory or incorrect in some fashion, depending on the current model.

In prior generations, any industry with such performance would be laughed clear out of the boardroom.

But because capitalism is desperately seeking a solution to what they perceive as a problem - how to obtain labour without having to pay said labour - AI is being adopted hand-over-fist.

After all, the underlying purpose of AI is to allow wealth to access skill while removing from the skilled the ability to access wealth.

[–] tonytins@pawb.social 1 points 2 hours ago* (last edited 2 hours ago)

Ugh... Minor rant.

My aunt is into tech like me. She dived head first into the AI in the middle of the hype instead of during IoT era when machine learning (the foundation of modern GPT models today) was part of a larger SDK for building smaller tasks. Now she won't stop pushing it onto my mom like a salesman by saying she should do this and that with ChatGPT or whatever, and it's so freakin' annoying.

Luckily, I've told my mom straight up to not buy into it.

[–] OsmerusMordax@sh.itjust.works 1 points 3 hours ago

Do you have references for these claims? I believe you, but I'd like to know more.

[–] iAvicenna@lemmy.world 1 points 3 hours ago

All this you listed is the reason why we are fucked if we keep depending more and more on "this" AI and don't get a revolution in the AI field to replace the current one with AGI. Because in ten years we risk losing a big chunk of expertise and if we don't have an AI that can really replace the current one with something that can actually replace experts then there will huge infrastructure problems across multiple industries.

[–] DeathsEmbrace@lemmy.world 5 points 4 hours ago* (last edited 4 hours ago)

Rich dumbasses found a place to waste all their money instead of the government taxing them and using that money for important things. they let them waste it on some climate change accelerator

[–] partial_accumen@lemmy.world 1 points 1 hour ago

The fact that he was even able to make that bet is incredible. How deluded do you have to be to think the AI bubble won’t burst?

Nobody believes the AI investment/growth trajectory we have right now will continue for infinity. What nobody knows is: when the correction will occur.

  • Do you pull your investments out now and sit on the sidelines waiting for the fallout while your principal loses value daily from inflation?
  • What does the correction look like when it happens? Does all the value evaporate on day 1, the first week, a month? This is important to figure out for this strategy to know when to go back in.

This is the info/decisions you'd need as an average investor. What Burry is doing is the riskiest type of investments with shorting the market. If growth continue to occur he and his fund will have to pay for the growth to those whose shares he borrowed to short.

In summary, its not enough to know that a bubble exists, but to profit from it you have to figure out when it will burst and when the full burst is done.