According to Business Insider, famed “Big Short” investor Michael Burry posted a series of social media critiques over the weekend, specifically targeting OpenAI. He compared the AI leader to Netscape, the iconic dot-com bust, calling it “doomed and hemorrhaging cash.” Burry claimed Microsoft is trying to keep OpenAI afloat off its balance sheet while extracting its intellectual property, and argued the whole industry needs a $500 billion IPO, saying a reported $60 billion raise would “not be near enough.” This follows his recent short position and criticism of Nvidia in June, where he’s now calling for proof that Nvidia GPUs are being warehoused in mass quantities. Burry also used his posts to defend his past bearish calls on meme stocks and inflation from 2021.
Burry’s Bear Case
Here’s the thing about Michael Burry: he’s not just some random guy on X. His track record gives his doom-saying a weight that most commentators don’t have. So when he says OpenAI is the next Netscape, you have to listen, even if you violently disagree. His argument is basically a cash incineration thesis. He sees a company burning unbelievable amounts of money on compute with no clear, profitable path to sustainability outside of a perpetual fundraising cycle. The $500 billion IPO comment is hyperbolic, but the point is stark: the capital requirements for this arms race are astronomical, and the current valuation music might stop. Comparing it to Netscape is a brutal but evocative shorthand. It’s the idea that being the first-mover or the technical leader in a seismic shift doesn’t guarantee long-term survival, especially when a well-funded, entrenched giant (Microsoft, playing the role of 1990s Microsoft/IE) is your primary backer and potential future competitor.
Stakeholder Whiplash
So what does this mean for everyone else? For developers and startups building on OpenAI’s APIs, Burry’s warning is a direct threat to their infrastructure. If OpenAI is truly financially fragile, it makes them a risky bedrock for a business. Enterprises signing huge deals might start asking more pointed questions about long-term viability and contingency plans. And for the broader market? Burry is trying to poke a hole in the biggest narrative driving stocks right now. If the flagship AI company is “doomed,” what does that say about the hundreds of billions in market cap added to companies in the ecosystem? It creates a chilling counter-narrative. His parallel crusade against Nvidia—questioning whether there’s a hidden glut of GPVs warehoused—aims at the other pillar of the AI trade. He’s trying to call the top by attacking both the software and hardware kings.
The Burry Paradox
Now, there’s a major paradox in all this. Burry is defending his past calls by saying it’s “ridiculous” to look back at a short call 5 or 10 years later, asking “You really think any short seller holds those positions for 5, 10 years?”. That’s a fair point about trading timelines. But it also highlights that his Netscape prophecy is a narrative weapon, not a timed trade. He could be wildly early. Netscape had its moment before it faded. OpenAI’s moment is arguably still in its explosive early phase. Being right eventually doesn’t mean you were right for the current market cycle, and his inflammatory style seems designed more for his new Substack audience than for quietly executing a trade. He’s building a brand as the perpetual skeptic, which is a great media position but a difficult investing one. Still, in a market drunk on AI optimism, having someone of his caliber throwing ice water is probably healthy. Even if he’s wrong, he’s forcing a conversation about costs, sustainability, and hype that much of Wall Street is happy to ignore.
