Finance

Michael Burry — the investor known for predicting the housing meltdown ahead of 2008 — has turned his attention to one of the market’s most beloved themes: artificial intelligence.
Burry recently deregistered his hedge-fund firm, Scion Asset Management, removing it from routine regulatory disclosures. But he remains actively investing, and he is doubling down on what he sees as the next major mispricing in markets.

Central to that view is Phil Clifton, Scion’s former associate portfolio manager, whose research underpins the skepticism. Clifton argues that while generative AI adoption is accelerating, the economics behind the industry’s massive infrastructure buildout have yet to justify the cost.
In his farewell letter to Scion investors in late October, Burry called Clifton “the most prodigious thinker” he’s ever encountered. CNBC obtained several of Clifton’s research notes from earlier this year, written before he launched his own firm, Pomerium Capital, that help outline Scion’s bearish thesis on AI.
The investment world is “expecting far more economic importance out of this technology than is likely to be provided,” Clifton wrote. “Just because a technology is good for society or revolutionizes the world doesn’t mean that it’s a good business proposition.”
Low margins
On the surface, AI usage appears ubiquitous. More than 60% of U.S. adults say they interact with AI at least several times a week, according to Pew Research Center. Yet Clifton said the economics on the demand side are “surprisingly small.”
OpenAI — market leader and cultural phenomenon — is set to surpass $20 billion in annualized revenue this year, but that figure is tiny compared with the size of the AI build-out. Hyperscalers have quadrupled their capex spend in recent years to almost $400 billion annually, with expectations of $3 trillion over the next five years, according to Man Group.

“We assume other generative AI services in aggregate are insufficient to justify the sums being spent on infrastructure,” Clifton wrote.
History’s warnings
Scion sees a clear historical parallel with the early-2000s telecom boom, when heavy investment in fiber-optic networks far outpaced actual usage. U.S. capacity utilization fell to about 5%, and wholesale telecom pricing collapsed roughly 70% in a single year, Scion noted.
Clifton argues the cloud giants are now in a comparable race, expanding AI infrastructure on the assumption that future demand will catch up eventually. But if mass AI adoption takes longer than expected, the economics on these massive data center deals could become untenable.
Some Big Tech companies are starting to wobble on commitments already, he noted. Microsoft has canceled data center projects set to use 2 gigawatts of electricity in the U.S. and Europe, citing an oversupply. Alibaba’s chairman has warned a bubble is forming in AI infrastructure.
The Nvidia Exposure
No company has benefited more from AI spending than Nvidia. The stock has surged alongside unprecedented GPU orders from cloud providers. But Scion questions whether those customers will ever generate economic returns on that investment.

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Nvidia one year

A key element here is depreciation policy. Tech giants have lengthened server lifespans on the books to six years. Yet Nvidia’s product cycles run every year now, making older chips functionally obsolete and less energy-efficient, long before they’ve been written down, Scion claims.
Nvidia has pushed back at this claim, saying its hardware remains productive far longer than critics say, thanks to efficiencies driven by the company’s CUDA software system.
Still, Burry and other critics are seizing on a contradiction. Nvidia says the newest chips are superior in performance, efficiency and capability, at the same time as it promises that older chips remain economically viable. One of those defenses, they say, has to give.
Burry has launched a new Substack newsletter to lay out his bearish thesis on AI. Whether generative AI ultimately proves to be a bubble remains to be seen, but for now, Burry is again positioning himself on the cautious side of a fast-moving story. More

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The iShares Bitcoin Trust ETF has recorded $2.2 billion in outflows this month, as of Monday, FactSet data shows.
That’s nearly eight times the $291 million in losses suffered by the investment vehicle last October, or its second-worst month on record since its debut in early 2024. 
The outflows come as bitcoin is down more than 20% over the past month.

CHONGQING, CHINA – JULY 17: In this photo illustration, a person holds a physical representation of a Bitcoin (BTC) coin in front of a screen displaying a candlestick chart of Bitcoin’s latest price movements on July 17, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)
Cheng Xin | Getty Images News | Getty Images

Blackrock’s spot bitcoin exchange-traded fund is having its worst month ever as its underlying asset suffers its largest monthly decline in more than three years.
The iShares Bitcoin Trust ETF has recorded $2.2 billion in outflows this month, as of Monday, FactSet data shows. That’s nearly eight times the $291 million in losses suffered by the investment vehicle last October, or its second-worst month on record since its debut in early 2024. 

Arrows pointing outwards

The outflows come as bitcoin is bleeding. The digital asset was last trading at $87,907.10 — down more than 20% over the past month and off more than 40% from its high of just north of $126,000 hit in early October. That makes November bitcoin’s worst month since June 2022, when the asset’s price fell about 39%.
“There’s no doubt that hot-money investments have had significant outflows,” Jay Hatfield, CEO and portfolio manager at Infrastructure Capital Advisors, told CNBC.
But, “the pullback is really focused on the gambling part of the market … and bitcoin is really the poster child for that,” he said. 
Investors are exiting Blackrock’s fund to rotate into risk-off assets such as gold amid mounting economic uncertainties and signs of souring market sentiment.
A recent survey from the University of Michigan showed that consumer sentiment has nosedived to near record-low levels. Meanwhile, investors are awaiting crucial data from the September retail sales and the producer price index reports, due out on Tuesday. And while the CME FedWatch Tool shows that traders are now pricing in more than 80% odds that the Federal Reserve will slash rates at its December meeting, such a cut remains far from sure bet.

Amid all the uncertainty, bitcoin is bleeding. And, investors in spot bitcoin ETFs, particularly newer holders, are feeling pressure to sell their shares — a reality that could extend the asset’s downside in the near term, Frank Chaparro, head of content and special projects at crypto-focused trading firm GSR, told CNBC. 
“With the macro environment becoming less certain, investors tend to de-risk across assets, which often means trimming exposure to crypto and other risk-sensitive stocks,” Chaparro said. “And for newer entrants who came in through the funds, any downturn can be unsettling – they can sell just as quickly as they bought.”
But while it’s true that spot bitcoin ETFs have brought in hoards of new retail investors who may be flighty during volatile times, the funds have also attracted a range of long-term investors such as institutions who can hold through the downturn, according to Joshua Levine, chairman at bitcoin treasury firm OranjeBTC, told CNBC. 
That institutional base could “dampen some of the extreme downside, but also smooth upside, reducing bitcoin’s volatility as the asset class matures,” Levine said.  More

Michael Burry attends the New York premiere of “The Big Short” at the Ziegfeld Theater in New York City on Nov. 23, 2015.
Jim Spellman | WireImage | Getty Images

Michael Burry, the investor who shot to fame for calling the housing crash before 2008, has launched a Substack newsletter after deregistering his hedge fund, aiming to lay out in detail his increasingly bearish thesis on artificial intelligence.
“The Big Short” investor is capitalizing on the massive audience he’s built on X, where 1.6 million followers have long parsed his cryptic posts. His new publication, titled “Cassandra Unchained” with a $379 annual subscription fee, arrives with a familiar warning: He believes markets are once again deep in bubble territory.

In announcing the launch, Burry referenced the parallels between the late 1990s tech mania and today’s rush into AI and how the bubbles have been ignored by policymakers, in his view.
“Feb 21, 2000: SF Chronicle says I’m short Amazon. Greenspan 2005: ‘bubble in home prices … does not appear likely.’ [Fed Chair Jerome] Powell ’25: ‘AI companies actually… are profitable… it’s a different thing. ‘I doubted if I ever should come back. I’m back. Please join me,” Burry wrote in a post Sunday night on X.
He highlighted then-Fed Chair Alan Greenspan’s 2005 insistence that U.S. housing prices showed no signs of a bubble, just two years before the subprime implosion validated Burry’s famous “Big Short.” And now he contends history is rhyming again.
Like the dot-com era, investors are extrapolating exponential growth, dismissing profitability concerns and funding massive capital expenditures on the assumption that the technology will rewrite the economy, he believes.
The investor noted Powell has waved off bubble fears, saying AI companies are “actually profitable” and “a different thing” from past booms.

“This is different in the sense that these companies, the companies that are so highly valued, actually have earnings and stuff like that,” Powell said during a news conference in October.
Burry took it as an eerie echo of the assurances offered by Greenspan two decades ago. At the height of the dot-com boom, Burry was publicly short Amazon. Today, he has been openly bearish on the poster children of the AI boom, Nvidia and Palantir. More

Omar Marques | Lightrocket | Getty Images

Robinhood shares suffered brutal weekly loss as the once-red-hot trades in bitcoin and AI stocks that powered its growth lost momentum.
The popular brokerage platform saw the stock decline 12.4% this week. The stock tumbled 10.1% on Thursday and rebounded 1% Friday. November alone has erased 27% of its market value.

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The latest slide reflects a sharp reversal in the risk-hungry investment activity Robinhood relies on. The company’s core business is closely tied to retail investors pouring into speculative corners of the market, particularly cryptocurrency and buzzy artificial intelligence stocks.
Those trades helped fuel a resurgence in Robinhood revenue and user engagement earlier this year as bitcoin hit fresh highs and anything tied to artificial intelligence soared. But the recent rout in crypto and high-growth tech stock leaders is exposing Robinhood’s sensitivity to sentiment swings.
Bitcoin has fallen about 12% this week alone, hitting a fresh low of $80,548.09 on Friday, the lowest level since April. Shares of AI enabler Nvidia are down 6% this week. More

Messages that come out of the top echelon at the Fed are measured carefully, calibrated between delivering clear ideas about policy without causing undue reaction in financial markets.
That’s why a speech Friday from the current New York Fed leader, John Williams, mattered so much to markets.
Ongoing concerns about AI tempered a stock market rally, but traders flipped positions, placing bets on a December rate cut.

John Williams, president and chief executive officer of the Federal Reserve Bank of New York, speaks during an Economic Club of New York (ECNY) event in New York, US, on Thursday, Sept. 4, 2025.
David Dee Delgado | Bloomberg | Getty Images

Communication at the Federal Reserve, particularly at the highest levels, rarely happens by accident.
Messages that come out of the top echelon, particularly the chair, vice chair and the powerful New York Fed president, are measured carefully, calibrated between delivering clear ideas about policy without causing undue reaction in financial markets.

That’s why a speech Friday from the current New York Fed leader, John Williams, mattered so much to markets. With his position comes membership in the Fed’s leadership troika, a group that also includes Chair Jerome Powell and Vice Chair Philip Jefferson.
So when Williams gave a nod to the likelihood of a “further adjustment in the near term” for interest rates, investors took it as a message from on high that the leadership is inclined for at least another rate cut sometime soon, likely at the December meeting of the Federal Open Market Committee.
“There is some ambiguity in the phrase ‘near term’ – but its most obvious reading is at the next meeting,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a client note.
“And while it is possible that Williams was offering a personal view, signals from the other members of the Fed leadership troika (vice-chairman, NY Fed president) on key live policy issues are almost always approved by the chair and it would be professional malpractice for him to deliver this signal without Powell’s sign-off,” he added.
Williams’ comments on rates come at an especially sensitive time for the Fed and financial markets.

The policymaking FOMC, normally a consensus-driven group sometimes maligned for lacking diversity of thought, has found itself suddenly divided.
On one side are officials who see policy as still holding back growth and open for adjustment, while the other is represented by those worrying about inflation who see solid economic growth with no need for further cuts, particularly in light of reductions already in the books from September and October.
While Williams provided little insight into the longer-term trajectory of rate expectations, at least in the short term it looks like senior Fed leadership backs a cut.
That’s particularly important to financial markets that have wobbled lately over fears of an artificial intelligence bubble, coupled with ongoing geopolitical concerns and uncertainty over Fed monetary policy.
Stocks rallied Friday, with futures turning around after Williams’ comments caused a market repricing toward the expectation of a rate cut in December. Ongoing concerns about AI tempered the rally, but traders continued to place bets on a December move, assigning a 73% chance of a reduction, according to the CME Group’s FedWatch gauge.
Williams likely saved the market Friday from a potential sell-off that appeared to be taking shape, with stocks outside of tech mostly firm and supporting the major averages on the prospects of lower rates. The major benchmarks were hit hard Thursday and investors feared another big slide was coming Friday. Major averages vacillated through the morning but were at session highs heading into afternoon trading.

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S&P 500, 5 days

“Williams intervention came after several other Fed speakers indicated reservations about [December] but drew back from categorical statements, perhaps indicating they recognize the [December] struggle was turning into a crisis of governance at the Fed and see the need to give Powell space to make the call,” Guha said.
To be sure, other speakers weren’t as enthusiastic as Williams.
Regional Fed Presidents Susan Collins of Boston and Lorie Logan of Dallas both voiced hesitation about further cuts. In a CNBC interview, Collins expressed concern about inflation. Logan was even more hawkish, saying she wasn’t even sure she would have voted for the previous two cuts. Collins votes this year on the FOMC, while Logan gets to vote in 2026. More

Bitcoin fell sharply after a sell-off of major U.S. stock indices. Bitcoin has been correlated closely to the price movement of the Nasdaq index.
Luke MacGregor  | Bloomberg | Getty Images

Bitcoin tumbled as much as 6% early Friday, hovering just above its critical $80,000 support level at one point, as investors continued their flight from risk-on assets to more defensive plays.
The largest cryptocurrency by market capitalization hit $80,548 at around 7:30 a.m. ET. The token’s plunge to that price — its lowest since April 11— marks a steepening of bitcoin’s decline following widespread cascading liquidations of highly leveraged crypto positions in October.

“Price action has been unimpressive across the large tokens, BTC dipping below the year-start price as long-time and larger holders of the token have become more active,” Citi analyst Alex Saunders said Friday in a note to clients. “ETF flows, the main driver of BTC prices, are also drying up, adding to the short-term performance worries.”
Bitcoin has since regained some of its losses to trade down 4% to $82,939.59, according to Coin Metrics. The cryptocurrency has fallen 12% since the beginning of the week and roughly 26% over the last month.

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Bitcoin value year to date

The token’s slide follows mounting pressure in the U.S. stock market, which has led investors to rotate out of volatile assets like crypto and artificial intelligence stocks into safe-havens such as gold. The Nasdaq Composite fell 2% on Thursday, as a rally sparked by Nvidia’s blockbuster earnings on Wednesday lost steam. Its fizzling underscores investors’ increasing scrutiny of sky-high AI valuations. Investors in AI also often hold bitcoin, linking the two trades.
Cryptocurrency stocks were also in the red. Strategy, a bitcoin treasury firm, has fallen 2% on the day and is now down 42% over the past month. American Bitcoin and Riot Platforms shed 7% and 4% in Thursday’s session, respectively.
Bitcoin is now down 9% since the beginning of the year, despite smashing several price records following President Donald Trump’s inauguration in January.

Amid the administration’s pro-crypto policies, it last sailed to a record price just north of $126,000 in early October. But, it’s now more than 30% off that high.
“We’re in very oversold territory for bitcoin right now,” Sebastian Pedro Bea, chief investment officer at crypto asset management firm ReserveOne, told CNBC. More

Beijing has increased its pushback against Japanese Prime Minister Sanae Takaichi’s Taiwan comments.
Concerts with Japanese artists in Beijing have been canceled or postponed, sometimes with little notice.
“You don’t have predictability because nobody announces the policies publicly,” said Christian Petersen-Clausen, a music agent who has organized more than 70 concerts in China over the last 12 months.

The Beijing music venue DDC was one of the latest to have to cancel a performance by a Japanese artist on Nov. 20, 2025, in the wake of escalating bilateral tensions.
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BEIJING — China’s escalating dispute with Japan reinforces Beijing’s growing economic influence — and penchant for abrupt actions that can create uncertainty for businesses.
Hours before Japanese jazz quintet The Blend was due to perform in Beijing on Thursday, a plainclothesman walked into the DDC music club during a sound check.

Then, “the owner of the live house came to me and said: ‘The police has told me tonight is canceled. No discussion,'” said Christian Petersen-Clausen, a music agent who has organized more than 70 concerts in China over the last 12 months.
“Everything Japanese is canceled now,” he said. He added that he’d spent six months getting Chinese censors’ approval to allow The Blend to perform in the country.
DDC announced Thursday afternoon that the evening’s concert was canceled due to force majeure and that ticket holders would be automatically refunded in the coming days.
Japanese singer-songwriter Kokia’s Wednesday evening concert in Beijing was also canceled, according to the venue. Its public announcement, dated Thursday, blamed technical issues.
Again, there was little advance notice. One social media post from a fan described waiting outside the venue for more than an hour, until well past the time the concert was scheduled to start.

Other concerts by Japanese artists in China have also been canceled or postponed this week.
It appears to be the latest fallout from an escalating spat between China and Japan over Prime Minister Sanae Takaichi’s Nov. 7 comments indicating Tokyo would support Taiwan if seriously threatened by Beijing’s military. Beijing claims territorial rights to Taiwan, a democratically self-governed island. Taiwan rejects this claim and says that only its people can decide its future.
“The pace and scale of Beijing’s reactions … are quite unprecedented,” said George Chen, partner of The Asia Group, a business policy consultancy based in Washington, D.C. He added that the biggest risk for Japanese brands in China would be a nationwide boycott, although so far there are limited signs that Chinese consumers are avoiding the brands at scale.
Two Chinese ministries late last week started warning citizens against traveling and studying in Japan. China’s Commerce Ministry on Thursday also threatened countermeasures against Japan if it “persisted on the wrong path,” according to a CNBC translation.
Mainland Chinese tourists have been the largest group of foreign visitors to Japan so far this year, and Nomura estimates bilateral tensions could cut the smaller Asian country’s GDP by 0.29%.

Limited policy communication

No ministry has publicly issued a ban on Japanese concerts, however. CNBC was unable to reach the culture ministry for comment as it was outside of Beijing business hours.
And it’s not just music that is potentially affected, with reports that Beijing will ban imports of all Japanese seafood — something China’s commerce ministry declined to confirm or deny. The foreign ministry has only said that, “under current circumstances, there will be no market for Japanese aquatic products even if they enter China.”
The developments reinforce how top-down policies in China can be abrupt and vague, making it difficult for businesses to plan.
“You don’t have predictability because nobody announces the policies publicly,” music agent Petersen-Clausen said. He said he organized a Japanese concert in Shanghai on Wednesday with no issue, and “nobody has said to us that Saturday[‘s concert] is for sure canceled.”
However, China’s rhetoric remains firm, with the foreign ministry on Thursday calling again for Takaichi to retract her remarks and warning that “if Japan creates trouble on Taiwan, Japan will not get away with it.”
“Basically what that means is, I have no hope for Saturday,” Petersen-Clausen added.
The venue had expected around 200 attendees on Thursday alone, he said, adding that around 20 Chinese people would have gotten paid for related work around both shows. Tickets for the jazz performance were listed at the equivalent of between $40 and $70 each.
The movie industry could also come under pressure. The local release of Japanese animated films featuring Crayon Shinchan and the “Cells at Work” series have been postponed, Chinese state news agency Xinhua said Wednesday. It cast the move as “prudent” based on falling Chinese interest in Japanese films.
“The risk to Beijing is that the perception that it has overreacted reinforces anti-China sentiment in Japan, as it did in South Korea,” Teneo analysts said in a report.
“If Beijing chooses to continue ramping up pressure over the incident, additional measures could include new barriers to imports from Japan justified by trade investigations or product safety concerns.” 

Music an early target

Perhaps surprisingly, international music performances are often the first affected by geopolitical disputes.
Following Russia’s invasion of Ukraine in early 2022, some venues in the U.S. and U.K. canceled appearances or shows involving artists believed to be supportive of Russian President Vladimir Putin. China has also restricted large-scale Korean pop music performances for nearly a decade to protest a new missile system, although there are indications these acts could return soon.
For Petersen-Clausen, the uncertainty around concerts in China is hurting business.
“Foreign musicians have refused bookings from us because they said we don’t know if it will actually go ahead or be canceled,” he said. “This word has gotten around that China is sometimes unstable. That is a problem for us if we want to foster people-to-people exchanges.” 
“If we don’t get stability and predictability,” he said, ”I’m going to have to disclose a very significant risk that is an unnecessary risk to potential investors.”

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Taylor Swift’s $2 billion Eras Tour did not include China, although Mariah Carey and the Black Eyed Peas both performed in the mainland this year. Chinese policymakers have sought to encourage some live events as a way to boost consumption and the overall economy.
But national leaders also have other priorities.
“Along with sports, music and arts are the first things governments ‘rediscover’ as a means to engage or re-engage,” said James Zimmerman, a lawyer in Beijing and former chairman of the American Chamber of Commerce in China.
“What happened to diplomacy?” he said. “These kinds of debates lead to an erosion of trust, which gets harder and harder to rebuild on both sides. We are seeing that in many bilateral relationships around the world.”
— CNBC’s Hui Jie Lim contributed to this report. More

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Andriy Onufriyenko | Moment | Getty Images

Bitcoin dropped on Thursday to levels not seen in more than six months, as investors appeared to pull back exposure to riskier assets and weighed the prospects of another Federal Reserve rate cut next month.
The flagship digital currency fell to as low as $86,325.81, its lowest level since April 21. It last traded at $86,690.11.

The release of stronger-than-expected U.S. jobs data raised questions about whether the central bank would lower its benchmark overnight rate. The U.S. economy added 119,000 in September, well above the 50,000 economists polled by Dow Jones expected.
That report sent the probability of a December rate cut to around 40%, according to the CME Group’s FedWatch tool.
Bitcoin’s pullback formed part of a broader cryptocurrency market decline. XRP was last down 2.3% on the day, and is below $2.00, while ether shed more than 3% to trade well below $3,000. Dogecoin was unchanged.
The world’s oldest crypto also led stocks lower, even after a blockbuster Nvidia earnings report. Traders who are heavily invested in AI-related stocks tend to also hold bitcoin, linking the two trades.
Bitcoin’s price has largely slid since a rash of cascading liquidations of highly leveraged crypto positions in early October. More