Michael Burry, the famed investor celebrated for predicting the 2008 financial crisis, has sounded a fresh alarm. This time, his warning targets the very foundation of America's artificial intelligence ambitions. Burry argues that the United States is on a losing path in the global AI race due to a critical structural weakness: its energy infrastructure and over-reliance on a single chipmaker's technology.
China's Power Surge vs. America's Grid Lag
In a series of pointed posts on the social media platform X, Burry presented a stark contrast. He shared charts indicating that China's electricity generation capacity has skyrocketed past both the US and Europe since the early 2000s. For Burry, the concern is not just the total power output but the speed of expansion. "It is not just the total power advantage. It is the slope," he wrote, highlighting China's rapid, state-driven buildout against America's slower, permit-constrained grid development.
He contrasted China's "build-at-will" model for transmission infrastructure with the bureaucratic hurdles slowing progress in the US. This fundamental disparity, Burry suggests, creates a deep structural disadvantage for America as AI computing demands ever more energy.
Nvidia's Roadmap: A Power Consumption Crisis?
Burry directed sharp criticism at Nvidia, the undisputed leader in AI computing chips. He contends that the company's technological roadmap is essentially a "power consumption roadmap." According to him, innovation in the sector has become focused on "how to power and cool bigger, hotter silicon," while efficiency gains fail to match the explosive growth in computing needs.
"Power hungry Nvidia chips are not the way forward," Burry cautioned. He believes the US is taking a significant structural risk by allowing its AI strategy to be tethered to these increasingly energy-intensive components. Instead, he advocates for a strategic pivot toward more specialized and efficient hardware like AI-tuned ASICs (application-specific integrated circuits), moving away from brute-force scaling with massive data centers.
Soaring Valuation and an Unsustainable Path
Burry also cast a skeptical eye on Nvidia's monumental market valuation. With a market capitalization of $4.40 trillion and having briefly touched the $5 trillion mark in October, Nvidia is the world's most valuable company. Its stock has soared 1,293.30% over the past five years, backed by staggering financials like its latest quarterly revenue of $57 billion, a 62% year-on-year increase.
However, Burry hinted that accounting tactics might be inflating this valuation. This skepticism feeds into his broader thesis: America's heavy dependence on Nvidia represents an unsustainable strategy. He warns that US companies pouring billions into the AI arms race are "structurally positioned to lose" if they continue down this path without addressing the core issues of energy and hardware efficiency.
Burry's analysis presents a sobering counter-narrative to the unchecked optimism surrounding AI. It frames the competition not just as a software or chip race, but as a foundational battle over energy infrastructure and strategic hardware design, where he sees the United States currently falling behind.
