Michael Burry Says Anthropic’s IPO Filing Changes Nothing About His AI Bear Case — Flags Financial Risks Beyond The Tech
Michael Burry agrees that AI technology is improving, but he remains worried about how companies pay for it, how much debt they take on, and how much they spend on the equipment and systems it needs.
He warned about risks involving demand for computer chips, memory supplies, and differences between when funding is available and when investments need to be paid for.
Anthropic filed paperwork on Monday to list its shares on the Nasdaq under the ticker ANT. It did not set a share price or say how many shares it would sell.
Michael Burry, the investor known for predicting the housing market crash portrayed in the film "The Big Short," said Anthropic's IPO filing has not changed his negative view of AI investments. He said that even though the technology is getting better, he remains concerned about how companies raise money, how much they spend on infrastructure, and whether their growth can continue.
Burry's doubts differ from the excitement among individual investors discussing Anthropic on Stocktwits. Sentiment toward Anthropic was "extremely bullish," and the number of messages was "extremely high." In contrast, Stocktwits users were "bearish" on the SPDR S&P 500 ETF Trust (SPY) and the SPDR Dow Jones Industrial Average ETF Trust (DIA), with a "normal" number of messages. The Invesco QQQ Trust (QQQ) had "extremely bearish" sentiment and a "high" number of messages.
Better AI Does Not Ease Burry's Financial Concerns
"There is a lot here but nothing that changes my view," Burry said in a discussion on his Substack about Anthropic's IPO filing. "There is so much more going on than this s-1 addresses."
Burry made these comments after a reader asked whether advances in large language models (LLMs), a type of AI that can understand and create text, had changed his view of the technology. The reader said, "Everyone since 2024/5 said LLMs will hit a wall/plateau but it really didn't and is still exponentially improving. The narrative is still strong and continues to fuel further buildouts and investment."
"My view in a nutshell is that the tech is improving and that has nothing to do with any short thesis," Burry replied. He then explained the financial and industry risks behind his position.
"I am looking at the financing, the insurer shell leverage in it, the inability to plug in the latest chips floating demand for earlier chips, the dram capacity repurposed for HBM is not gone and will return with a vengeance, compression and SLM proliferation on open weight models, the fundamentals behind not just companies but the deals they are doing," he said.
His concerns include how companies borrow money and structure deals, demand for computer chips, the supply of memory chips, and the growing use of smaller AI models that can run more efficiently. DRAM is a type of computer memory, while HBM is high-bandwidth memory used to move data quickly. He warned that memory-making capacity that was switched to producing HBM could return to other uses in large amounts. He also pointed to the growing use of compressed AI models and small language models (SLMs) that are available with open weights.
Burry also warned that the timing of funding may not match the timing of the investments it supports. He returned to the difference between AI technology improving and AI companies continuing to grow quickly.
"I have never said that LLMs would stop improving," he said. "I think they are already being used more efficiently and that trend will continue, to the detriment of their growth rate."
What Burry Says Anthropic's Filing Leaves Out
Speaking specifically about Anthropic, Burry said the filing did not include recent changes in the market for AI developers. "The end of q2 and during q3 a lot changed in the developer landscape, and that is not in this prospectus," he said.
He also questioned how the filing dealt with a slowdown in tokenmaxxing, the practice of trying to use as many AI tokens as possible. "Overall slowing of growth is not attributed to a decline in tokenmaxxing but I did not expect that to be mentioned," Burry said. "The Information reported Meta's Claude Code users fell from about 60,000 to 30,000 after the tokenmaxxing clampdown."
These comments follow Burry's earlier criticism of high AI company valuations. In an earlier post on X, he said Anthropic's valuation was enough to buy 78 profitable companies in the S&P 500, including Domino's, Clorox, and lululemon. He had also called for the stock market to fall before OpenAI and Anthropic went public. "For the benefit of humanity, the markets should tank hard and prevent the OpenAI and Anthropic IPOs," he said.
In September, Burry said he had moved up his expected timeline for a downturn in the AI market. He also replaced direct short positions, which can make money when stock prices fall, with put options, which can gain value when prices drop. "If the spending stops or slows, it all comes apart," he said at the time.
Anthropic Shares Financial Details Ahead of Its IPO
Anthropic, the company behind Claude, filed paperwork on Monday to list its shares on the Nasdaq under the ticker ANT. It did not set a share price or say how many shares it planned to sell. The filing gives investors a closer look at the company's fast growth and its need for large amounts of money. Anthropic reported $16.3 billion in revenue in the first half of 2026 but also reported a net loss of $80.7 billion. Most of that loss came from a non-cash accounting adjustment linked to convertible financing, a way of raising money that can later turn into shares. Its operating loss, which measures losses from its main business activities, fell to about $693 million.
The filing also describes large computing commitments that will last for several years. It warns that growth could slow, security threats could arise, and AI systems could behave in harmful ways. Competition from tools made by customers themselves is also putting pressure on the business. Meta's Claude Code users reportedly fell from 60,000 to 30,000 as the company laid off workers and shifted toward alternatives it developed internally.
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Deepti Sri does not own any of the stocks mentioned in this article. StockTwits' news team provides information, not investment advice. For more details, see its editorial policy. This article was first published on StockTwits.