Burry Warns Big Tech's AI Spending Could Lead to Massive Write-Offs by 2029

Financial expert Michael Burry has sounded an alarm over Big Tech's massive spending on artificial intelligence (AI) infrastructure. In a recent blog post, he compared the current AI boom to past capital-cycle bubbles and warned of potential write-offs in two years.

Burry noted that hyperscalers are building enormous financial commitments through leases, purchase obligations, and other off-balance-sheet arrangements, rather than conventional capital expenditure or debt. He estimates that Alphabet has nearly $900 billion in contractual commitments, while Amazon's uncommenced leases and purchase commitments surged 81% to around $267 billion in nine months.

Burry also questioned Microsoft's accounting treatment of its data-center buildout, which he said allows the company to shift spending toward operating leases and reduce reported capital expenditure. He warned that the consequences of these arrangements could become visible around 2028 or 2029, when companies may face significant write-offs.