Michael Burry more confident than ever AI bubble will burst within a year, targets Micron and Nebius

Michael Burry has pulled forward his timeline for the AI trade to unravel. He now thinks a serious correction could arrive in as little as one year.

The investor laid out his reasoning in a string of Substack posts in late September 2026. He has also rebuilt his bearish bets around put options on AI and chip names, including Micron Technology and Nebius Group, that run into mid and late 2027.

From shorts to puts

Earlier in 2026, Burry opened short positions in Nebius, Micron, and Oracle. He has since swapped direct shorts on Micron and Nebius for put options set to expire in June and September 2027.

The strike prices offer a sense of how far he expects things to drop. His Micron puts carry a strike of around $500, while his positions on the SOXX semiconductor ETF sit at strikes in the low $400s.

SOXX is an exchange-traded fund that tracks a basket of chip stocks. Betting against it is a way of wagering on the entire semiconductor sector, not just one company having a bad quarter.

Beyond Micron and Nebius, Burry also called out Nvidia, Palantir, and Oracle as players in the AI trade he views skeptically.

Why Burry got more bearish

Burry pointed to a report from Ares Management as a key factor in his decision. The report focused on the enormous sums being poured into data infrastructure to support AI.

His central concern is how that spending is being paid for. Much of the capital expenditure on data centers is financed with debt, according to the material Burry highlighted.

He described himself as “more confident than ever” that an AI bubble downturn will play out within a year, citing what he sees as excessive capital spending across the sector.

Burry also leaned on comments from Acer’s CEO about memory supply reaching equilibrium, particularly in DDR4. That observation ties directly to Micron, one of the companies most exposed to memory pricing.

What this means for the AI trade

The most telling detail may be the structure of the bet rather than its direction. Moving from open-ended shorts to defined-risk options suggests even a committed bear is respecting how stubborn the AI rally has been.

Timing is the obvious risk for Burry. Options expire, and his puts run out in June and September 2027. If the correction he expects arrives later than that, being right about the direction will not save the trade.

The signals worth watching include memory pricing trends, the pace of debt issuance tied to data center projects, and whether major AI spenders begin showing clearer returns.

Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.