# Ray Dalio warns of an AI bubble as Michael Burry bets against Nvidia and Palantir

Digest AI · Society & Work · published 2026-11-04T06:35:00Z

Canonical: https://digestai.news/story/ray-dalio-warns-of-an-ai-bubble-as-michael-burry-bets-against-nvidia-a

## Summary

Ray Dalio warned at the Forbes Global CEO Conference in Singapore in October that the AI boom resembles a classic bubble nearing a dangerous turning point, citing heavy borrowing for AI infrastructure and rising interest rates as risks to sustainability. He pointed to CoreWeave as an example and noted that paper wealth does not always mean cash on hand. Michael Burry, in an October 11 Substack update, said he moved most of his bearish options positions into puts on the Nasdaq-100 and the VanEck Semiconductor ETF (SMH), shifting his bearish stance from individual stocks like Nvidia and Palantir to broader technology and semiconductor markets. According to Nvidia's CFO Colette M. Kress, the cloud industry backlog is now over $2 trillion, with the five biggest hyperscalers expected to spend nearly $800 billion in 2026 and $1.3 trillion in 2027.

## Key points

- Dalio warned the AI boom resembles a classic bubble nearing a dangerous stage due to debt-fueled infrastructure spending
- Burry shifted his bearish bets from Nvidia and Palantir to puts on the Nasdaq-100 and VanEck Semiconductor ETF (SMH)
- Nvidia's CFO said the cloud industry backlog is over $2 trillion, with hyperscalers set to spend $800B in 2026 and $1.3T in 2027

## Why it matters

High-profile investors questioning AI valuations signal growing skepticism about whether current spending will generate returns, which could affect market sentiment and funding for AI companies.

## Sources

1. [Ray Dalio Is Warning of an AI Bubble. Michael Burry’s Bets Against Nvidia and Palantir Add to the Debate.](https://finance.yahoo.com/technology/ai/articles/ray-dalio-warning-ai-bubble-143626447.html) (finance.yahoo.com, 2026-11-04)

Part of the developing story: [Wall Street Warns of Looming AI Bubble](https://digestai.news/thread/motley-fool-analysts-debate-ai-bubble-risk-and-corporate-debt-levels) (2 stories)

## Cite

Digest AI, "Ray Dalio warns of an AI bubble as Michael Burry bets against Nvidia and Palantir", 4 November 2026, https://digestai.news/story/ray-dalio-warns-of-an-ai-bubble-as-michael-burry-bets-against-nvidia-a

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