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Michael Burry Warns AI Capex Boom Could Collapse Like 2008 Housing Market, Apollo Economist Flags Macro Risk
['Ewan Scott']
Foreign Policy Journal
Investor Michael Burry, best known for predicting the 2008 financial crisis, is sounding fresh alarms over the rapid expansion of AI infrastructure spending across major U.S. tech companies.
Burry shared a post from Apollo Global Management (NYSE: APO) Partner and Chief Economist Torsten Slok, describing it as “three great charts” that draw a striking comparison between the current AI data center buildout and the housing boom-and-bust of the 2000s.
Data center investments remain less than half the size of residential investments at their peak, which reached 6.6% of GDP in 2005, but the pace of increase is far faster than either previous cycle.
“A cycle that builds at 0.85 percentage points a year can unwind at a similar pace, and that, rather than the buildout itself, is the macro risk if AI demand disappoints,” Slok wrote.
S&P said in May that U.S. hyperscalers’ accelerating AI investments could reach $1 trillion in 2027, driven by AI demand, rising component costs, and capacity expansion, with Microsoft, Alphabet, Amazon, and Meta all continuing to lift spending.