For what it's worth Michael Burry is pretty much short on the entire thing. At some point(I think mid 2027) those data centers bankrolled by loans will have to start paying rent to investors who bought those loans.

If companies that are basing X% of their future earnings on new AI based products don't pay up a bunch of those data centers are not gonna be re-leased. It's gonna be a problem. An seasoned analyst can take educated guesses as to what that X is: investments made in pure chips by Nvidia/AmD vs how much capital investment— not VC — Faang(i.e ones that are just using the chips for building software) are putting into them. The difference between investment devoted to pure DC build out minus what they are spending is a good proxy to understand the overinvestment.

> for what it’s worth

Not worth much. Hasn’t Burry called a number of bubbles since the great financial crisis, none of which have come to pass? Seems like a broken clock to me (he’ll still be right twice a day.)

Here is some data for example from a macro standpoint https://x.com/Brad_Setser/status/2110415047268933826?s=20

The trade surplus of Taiwan, China, Korea, Japan etc including chips has been sky rocketing. This is like Bill of materials(BoM) and it's at least 3-4 trillion in chips for AI alone, summing it up over the past 3 years.

Yes, separate from the “do AI startups have a viable business?” issue is the datacenter debt bomb ticking on the horizon.