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Michael Burry says neither SpaceX nor Anthropic is worth $1T
- beernet 4mo agoAI doomers really are punching the air these days. They will be right eventually and inevitably. Until then, it's funny watching them build a personal "brand" just to say "I told you so" when the market drops in X years.
- epolanski 4mo agoHe didn't say AI is doomed or a fluke, he said that these two AI companies aren't worth 1T in capitalization. The same way semiconductor, internet or railroad companies were not great investments regardless of how important the technology was going to be. It's still a financial investment and it's only going to pay off if bought at the right price, not at crazy multiples. I will also add: if all your moat is your latest model, you're as good as your latest model and can be easily dethroned. Strong moats are monopoly-like concessions (Verisign), exclusive technological edge (ASML), brands (Coca Cola), etc.
- alexpotato 4mo ago> brands (Coca Cola), etc. Paul Graham doesn't think so https://paulgraham.com/brandage.html https://paulgraham.com/brandage.html
- hparadiz 4mo agoAnthropic is the one company where that makes no sense. If revenue really is about 50 billion annually and growing than that means that a 20x 1 year of revenue valuation is modest compared to the shenanigans that have been going in the market. It's almost classically textbook conservative in comparison. The moat with these corporate enterprise contracts is literally your conversation history and companies aren't likely to jump ship when everyone likes the tools so long as costs stay nominal. AI at most orgs isn't even the biggest line item.
- epolanski 4mo agoAll competitors need are their latest model to be either better or similar but much cheaper. And Anthropic has no less than 2 big competitors in the space in US alone providing similar quality models. There's no moat in LLMs when you're as good as your latest model. Companies out there aren't in the business of throwing money down the drain. Take DS4, you can use Deepseek APIs directly with Claude Code, and you're unlikely to notice a difference for the overwhelming majority of your use cases. But your bills run in few $ per day. I'm talking 2 magnitudes less.
- hparadiz 4mo agoYou forget the institutional inertia of how these things get negotiated from year to year. If something is working for people they tend to wanna keep it. The existing curation of how everything works is cheaper than rolling your own. Sure you can get something running yourself but integrations for a lot of people are worth some of this cost. Also for AI heavy customers (multimedia, video, etc) the sky is the limit and there's not enough processing for it right now.
- epolanski 4mo agoThat logic works for 20 vs 40$ SaaS subscriptions, not for burning triple/four digits per day in APIs.
- potatototoo99 4mo agoWe know nothing about Anthropic, they make a few money go round deals, announce a bit of revenue, extrapolate it into the whole year and people parrot that they may be making $50bn. Most likely the cost to remain competitive eats at whatever revenue they could hope to make. I expect them to fudge the numbers the last quarter before their IPO, dump on passive investors, and then go back to being officially unprofitable.
- mapt 4mo agoAs of March 2026 lifetime revenue was >=~ $5 billion, and total 2025 revenue was supposedly around $4.5 billion. https://www.wheresyoured.at/anthropics-profitability-swindle/ https://www.wheresyoured.at/anthropics-profitability-swindle...
- mschuster91 4mo ago> Strong moats are monopoly-like concessions (Verisign), exclusive technological edge (ASML), brands (Coca Cola), etc. Agreed with the exception of Verisign. Many a "security" company went bust like DigiNotar after mishaps or hacks. Being a globally trusted root CA or DNS operator is a strong moat - but also an incredibly brittle one. And brands... brands aren't as safe as we thought either, as "store brands"/"private labels" are taking up more and more market share [1]. [1] https://www.nbcnews.com/business/consumer/shoppers-are-trading-private-label-store-brands-even-realizing-rcna215285 https://www.nbcnews.com/business/consumer/shoppers-are-tradi...
- monooso 4mo agoYour comment suggests that you (1) didn't read the article, and (2) have no idea who Michael Burry is.
- toasty228 4mo agoBeing an AI enthusiast doesn't mean you have to say "yes my lord" to every coked-up delusions dario, musk and altman decide to regurgitate today. This feels more and more like football team shenanigans, or even a cult.
- dansmith1919 4mo agobro was right ONCE and now every tweet is a headline
- mschuster91 4mo agoHe's still right this time. Neither Anthropic, Open AI nor SpaceX in its current form is a good candidate for an IPO at valuations that all but guarantee hundreds of billions of dollars in "passive capital" aka pension funds and ETFs will have to buy in. SpaceX might have been a candidate on its own core business (aka: launching spacecraft and Starlink), but ever since the weird side deals with all of the other companies in the Muskverse (Twitter, xAI, Tesla) it is far too contaminated. Sooner or later the AI bubble will burst - and assuming that the pension funds and ETFs buy in as projected, they stand to lose a lot of money that will make Covid's first lockdown + dotcom + 2007 Lehman combined look pale.
- potatototoo99 4mo agoElon must be looking to merge the new amalgamation of SPCX into TSLA and join all his sinking ships in one. Starlink itself won't be able to save that, but make it too big and the government might. That is the way to get to the ridiculous valuations needed for Elon's pay package.
- cmsj 4mo agoTrue, but the VC money will have been paid back, and what are we if not meat for the soulless machine of capitalism?
- mellosouls 4mo agoIt was a hell of a once tho
- IAmBroom 4mo agoSo, a lottery winner.
- helsinkiandrew 4mo ago
- lifty 4mo agoIt’s very risky to make these kind of claims. If the denominator (USD) gets obliterated they might very well be worth $1T. It’s all about liquidity and central banks have a whole bag of tricks at their disposal. They never want to see deflation shocks again and they prefer asset inflation.
- monooso 4mo agoThat seems like a hollow win.
- conorcleary 4mo agoYea, the rest of us run on timestamps.
- pu_pe 4mo agoThe stock market doesn't operate on long-term principles anymore. So, in some sense, it is immaterial that the rosy scenarios where AI is responsible for >$30 trillion in the next decade are unlikely. If you bet against the hype and it goes on for a few more months/years you lose as much or more than if you went along for the ride. Burry is well aware of this, he has written about how passive investing is contributing to this problem.
- A_D_E_P_T 4mo ago> The stock market doesn't operate on long-term principles anymore. It has been broken since ~2008 (ZIRPs, etc.) and has really gone off the rails since BTC and memestocks have taken off. Now everything's a memestock. It's all vibes-based.
- fireflash38 4mo agoPeople have seen others make insane, life changing money at this slot machine and are wanting to take their chances. There are no fundamentals. There is very low signal to the noise.
- bumby 4mo ago>People have seen others make insane, life changing money at this slot machine and are wanting to take their chances. Isn’t this the exact same sentiment from the late 1920s when people were making “insane, life changing” money by buying equities on margin?
- Eddy_Viscosity2 4mo agoThis time is different. It may well though, because now we have an automatic buy from the government to 'fix' the market if it 'breaks'. The line goes up.
- idiotsecant 4mo ago
- deleted 4mo ago[deleted]
- whazor 4mo agoI think you could argue Anthropic could be worth $1T. With AI becoming an essential work utility, every global knowledge worker would want a claude subscription. There are 650M to 1B of such office workers. 300M workers × $50/month × 12 = $180B/year. The genie is not going back into the bottle, I have seen what claude code can do when properly connected to tools. But Micheals arguments are valid. There could be competition, or even local models, thus indeed becoming 'commoditized'.
- cyanydeez 4mo agothing is, we have both local models and local hardware and a true evaluation would do a calculation before openai inflated thw market, before nvidia made circular deals and the other distortions. i think youd find the ROI is nowhere near the API rates are the "price support" is entirely a figment of billionaires and their parasites trying to corner the market by horde logistics
- jappgar 4mo agoWhy would we need 1B office workers when Claude is supposed to fire everyone anyways?
- orwin 4mo agoWhat probability do you assign to that, especially since CC harness code leaked? Because I used frontier models this weekend (I had 78% of my assigned tokens for this month left, I wanted to burn them before June 1st, ended up with 24% left), and tbh, I don't see much of the improvement compared to the models I use day-to-day. I'd rather pay less for a slightly worse model. Stacktrace analysis (or any bug analysis really) is where LLMs have the most success rate imho, and free models are good enough since last year. As for coding/architecture tasks, frontier models seems to hallucinate less, but I wonder if it's the guardrails or the he model themselves.
- bpt3 4mo agoAI is far from becoming an essential work utility, Anthropic will not be used by approximately 100% of the office workers in the developed world, and a price to sales ratio of over 5 for a company that is struggling to become profitable due to high operating expenses seems exceptionally high. The problem with all these companies is that they are priced as if their training and inference costs are going to come way down, but somehow only for them specifically.
- jansan 4mo agoThe real question is how we are defining "worth." Much of the market has decoupled from traditional fundamental data, with Tesla's P/E of 380 illustrating this perfectly, but the Tesla stock price refuses to collapse. We all know the market can stay irrational much longer than you can stay solvent if you bet against it. If you watched "The Long Short" (excellent movie btw.) you know how close Michael Burry came to capitulation before his subprime bet paid off. He seems to have a tendency to be too early with his predictions, even with his genius GameStop investment. So while he may be right again fundamentally, his timing may be completely off and those companies could be "worth" significantly more than a trillion dollars, at least temporarily, in stock valuations. My personal prediction is this: The hype will go on longer than people think, just like with the New Economy. There is this quote from market analyst Larry Wachtel in 1999 who said: "Everybody's happy, everybody's making money - something's wrong here"[1]. Ironically, even Wachtel eventually succumbed to FOMO, capitulated, went in late, and lost a lot of money[2]. I am trying to not make his mistake, but it will be tempting to do so, I am sure about that. [1] https://youtu.be/uaK5tsH59UM?t=1188 https://youtu.be/uaK5tsH59UM?t=1188 [2] https://youtu.be/DSVPsP0Bfx0?t=456 https://youtu.be/DSVPsP0Bfx0?t=456
- jklowden 4mo agoExactly. Anthropic has been losing three-comma money until recently. In Q2 2026 it earned a profit for the first time, about $500 million. If we imagine they will earn $2 billion in 2026, that’s a 0.2% return on the $1 trillion investment. To believe the valuation, Anthropic earnings need to grow 100x. For a more likely outcome, I can recommend a bridge in Brooklyn.
- pjmlp 4mo agoOf course not, this is pure speculation just like in past cycles, until it goes bum.
- schonfinkel 4mo agoAnd this time the boooom has a larger blast radius than all the previous booooms combined.
- abirch 4mo agoThe largest so far. We have always been in a boom/ bust cycle. The difference is that they are coming faster and faster. I need to figure out the next one. The famous quote, "Markets can remain irrational longer than you can remain solvent," is widely attributed to the renowned British economist John Maynard Keynes 1883-1946
- idiotsecant 4mo agoKeynes died 50 years before this started being a saying. It was made by Gary Shilling.
- IAmBroom 4mo ago> I need to figure out the next one. The date is hidden in the last 8 digits of pi. Should be a snap for a smart person like you.
- kkkqkqkqkqlqlql 4mo agoYou know, like all the other booms.
- jstummbillig 4mo agoMinus, of course, all the times where it did not go bum, right?
- mrits 4mo agoMost people can't get past the kind of logic that declares Facebook doomed for 20 years because Myspace.
- helsinkiandrew 4mo agoMatt Levine made an interesting point that the SpaceX IPO looks like a short squeeze/pump and dump [1]: 1. Do an IPO. 2. Sell a small amount (5%) to price insensitive Elon Musk-fans at a $2 trillion valuation 3. Get in all the indexes, because you are huge. 4. Unlock more stock, which the index funds have to purchase [1] https://www.bloomberg.com/opinion/newsletters/2026-06-01/the-spacex-squeeze https://www.bloomberg.com/opinion/newsletters/2026-06-01/the...
- baxtr 4mo agoPlease, don’t buy the stock. It’s a classic retail investor trap
- helsinkiandrew 4mo agoThe issue is that once it's in the S&P500, Russel, Nasdaq100 etc indices - everyone with a pension or tracker fund will be buying it without thinking
- tossandthrow 4mo agoYes. I am severely reducing my exposure to these indices finding alternatives. My impressions is that US investors also have a special love for the S&P500 and could likely benefit from a non-US bias.
- mapt 4mo agoThe new thing lately is ETFs that are "Whole-Market minus Microsoft" or "Whole-Market Minus Magnificent Seven". You can achieve similar ends by combining a whole market fund with direct short positions if you're an institutional investor, but it gets a little needy of your attention and your calculator and your fees to maintain those positions as a low-cap retail investor (just buy a put a day or something?).
- throwfaraway4 4mo agoThis is why direct indexing is important. I can simply exclude these tickers. Will it skew it slightly from the index? Sure but I’m ok with that
- aaron695 4mo ago[dead]
- uriahlight 4mo agoIt'll be a wonderful crow feast to anyone who agrees with Michael Burry on this.
- martinclayton 4mo agoWhat's the rationale offered by NASDAQ for their new "15-days and you're in the index" rule for these massive IPOs? Seems equivalent to removing road safety rules for the least-tested, most-powerful new vehicles only.
- bombcar 4mo agoI suppose you could make an argument that these enormously large IPOs are themselves a new phenomenon and need to be accounted for.
- brainwad 4mo agoThey want the index to be representative of the top stocks listed on the Nasdaq, even if they are brand new. The Nasdaq 100 in particular is a marketing tool for the stock exchange, it's not a particularly principled index.
- martinclayton 4mo agoYeah, indeed. See (march) https://www.reuters.com/business/new-nasdaq-rules-include-fast-entry-new-listings-benchmark-index-2026-03-30/ https://www.reuters.com/business/new-nasdaq-rules-include-fa... Quote from Cameron Lilja, Nasdaq's global head of index solutions: "It is not necessarily representative to have a company that's big and could have a sizable representation in the index to keep them out for that long," Lilja said in an interview. "We're seeing share and corporate structures change - and companies that are staying private considerably longer are thus growing to be truly mega-cap companies before they even come to the public markets." There's been fewer IPOs recently so Nasdaq and competitors are all racing to woo the few big ones to list with them.
- Ekaros 4mo agoHow much will NASDAQ make for getting SpaceX on them? Surely it is not small sum?
- martinclayton 4mo ago
- wewewedxfgdf 4mo agoSo the company that actually makes computers programming computers work, ain't worth $1T. Whoever you are Michael Burry, you don't know shit about the implications, and where this is headed, and that the party only just got started. I sure do wish I had a big chunk of that overpriced Google IPO stock, and Amazon, and MS, and Apple, etc etc etc
- saidnooneever 4mo agomakes computers work. makes computer programming work. please go back to school
- axegon_ 4mo ago> the company that actually makes computers programming computers work LOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOL
- bhokbah 4mo ago> So the company that actually makes computers programming computers work Translation (took me while to understand this sentence): So the company that actually solved the problem of making a computer program write other computer programs
- kys11 4mo ago[dead]
- IAmBroom 4mo agoFor those that can't parse it, weewee was apparently saying: Burry says that the company making "computers that can program other computers" isn't worth $1T. However, if you can't even be bothered to find out who Michael Burry is, your opinion is nothing more than a driveby internet shooting. Adds nothing but noise.
- LightBug1 4mo agoLiterally adjusting my pension funds and ETA's away from this ... I don't even care if I lose out. I want stable growth. Not a nation obsessed with memestocks.
- schonfinkel 4mo agoAre you trying to be sane and rational in a market that has turned into a casino? U crazy or something?
- spwa4 4mo agoThis is what they're actually talking about: https://michaeljburry.substack.com/ https://michaeljburry.substack.com/ And the counterpoint is that META, GOOG, AMZN, MSFT are all betting their companies that AI is the next move. Just yesterday, GOOG lent another $80 billion to be invested in their AI hardware, and they're also investing their own stock in AI hardware, for a cumulative investment of already over $1 trillion. Clearly the tech sector thinks this is worth it. And of course the people deciding in FANG companies actually have numbers, Michael Burry has the same numbers you have. So these investments are "worth it" according to people with inside information. What Burry is doing, in one perspective, is calling out the leadership of FANG companies. Now that's the job of a short-seller of course. But that's the bet being made.
- iso1631 4mo agoDoesn't matter, it will go into the nasdaq/s&p at $1t, passive funds will have to buy it at that price, meaning a wealth transfer from 401ks to people with pre-ipo stock The only reason AI is worth $1T is if you believe it will continue to get better and displace all those jobs, not just in claude replacing knowlege workers, but in the outcome of that work being so transformational that physical work is also replaced. If it does, then the entire economy is completely turned over and it doesn't really matter as nobody will have a job, and thus the entire concept of the S&P and the western economy as a whole falls to bits.
- 10xDev 4mo agoThe belief (for some) is that it will create new jobs like previous revolutions. No one has said what those will look like yet though.
- chvid 4mo agoCoinbase IPOed 5 years ago and is (and has mostly been) trading below its IPO price. Perhaps private equity has become so skilled that when they finally sell to the public they leave nothing on table.
- kjksf 4mo agoOr maybe it's very rational because their 2021 (IPO year) revenue ($7,839m) was higher than their 2025 revenue ($7,181). Granted, their profitability is better but in 2021 they were (rationally) valued based on Great Expectations which didn't pan out. Now they're (rationally) valued on Much Less Great Expectations. So I think it has nothing to do with skills of early investors (not the boogeymen, irrelevant private equity) and everything to do with Coinbase being a fast growth company at the time of IPO and being negative growth company after IPO.
- directevolve 4mo agoIPOs are one-shot, sealed-bid auctions, and the winner’s curse applies. There are separate equilibria where the company maximizes its cash gains or its fully diluted market cap. It can pick which to target. “Leaving nothing on the table” would mean selling few enough shares at the IPO that you have to overpay to get shares at the IPO. Previous valuations are known, as is that implied by each choice of IPO price when looking at the book. So the skill is just in the company not needing all that much money and being great at generating hype.
- tejohnso 4mo agoAnd TSLA isn't worth it's current market cap of 1.47 trillion dollars either. Hasn't been of any consequence for years.
- simianwords 4mo agoI'm noticing a sort of mass hysteria and performative concern over AI's fundamental economics coming from grief/cope. I believe that Anthropic is worth $1T. I believe it won't go below it (inflation adjusted) for the next 2+ years. How do I make money with this?
- vfalbor 4mo agoThis is a very interesting comment. Companies like OpenAI or ChatGPT sell hardware hidden in tokens, and the token is different for each company depending on the tokenizer. The concern is this: when you have an Opus 4.7, Sonnet, or GPT 5X with an Nvidia H100 or H200 GPU, what will happen to this cost when, if not Nvidia, another Chinese company enters the market and starts running these models? The point here is that as long as Nvidia is the provider, and limits access to the machines and the number of data centers is also limited, these companies can be worth whatever they want. But the moment this starts to expand, the value will surely decline, because what you're selling isn't the model itself, which is ultimately just a 1 TB file that you have replicated across machines. What you're selling is access to a software program on a specialized machine. As long as you control the resource, which in this case is that machine, you'll have value. The moment other machine manufacturers enter the market, your value will decrease.
- dgellow 4mo agoOr the AI labs just take an increased margin? The model is ultimately what people want access to and are paying for
- batperson 4mo agoIf you check openrouter there are a tons of providers selling API access to open source LLMs at a fraction of the cost compared to SOTA models (codex/claude). What model you're serving and what kind of platform you serve is a big factor. I'm no expert but I think eventually we'll have even more specialized ASIC like machines with models burned into them and a that will absorb a chunk of the market, similar to what happened to crypto mining but to a lesser degree since the work isn't as static.
- arevno 4mo agoNN-specific ASICs won't buy you much more FLOPs per watt than GPUs/TPUs will. These chips are already extremely good at NN computation. Sure, you could remove GP shader support and free up 5% of your die for a few more cores (which btw is what TPUs pretty much are), but that's about it. Either way, you'll still be starving for data. The best work in this area is memory-integrated Big-Ass-Die or Big-Ass-Chiplet solutions like Cerebras which park SRAM right next to your cores, not ASICs.
- josefritzishere 4mo agoWhat's going on with SpaceX and the S&P seems pretty crimey.
- deleted 4mo ago[deleted]