Famous investor Michael Burry is sounding the alarm on the artificial intelligence (AI) financing boom, warning that current high-yield debt levels dangerously mirror the 1999 tech bubble or the dot-com era and explicitly rejecting the notion of a “cleaner” AI investment cycle.
The ‘Cleaner’ Market Illusion
Responding to recent macroeconomic data on X, Burry challenged the prevailing narrative surrounding the quality of AI-related debt.
Referencing data compiled by Apollo Global Management’s Chief Economist Torsten Slok, Burry pointed out that a staggering 38% of current high-yield bond issuance is now linked to AI. A high-yield bond, also known as a junk bond, is a corporate bond issued by companies with lower credit ratings.
He drew a direct, sobering comparison to the tech-media-telecom (TMT) bubble, noting that TMT bonds constituted 40% to 50% of high-yield issuance in the year 2000.
“High yield debt at 38% today vs 40%-50% back then belies the idea that today’s AI debt issuance is cleaner, backed by more profitable companies today,” Burry stated.
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