This article first appeared on GuruFocus.
Michael Burry (Trades, Portfolio) is back in warning mode and this time, he’s aiming at the AI spending boom. In a recent post, the investor best known for The Big Short openly questioned how long Big Tech can keep pouring hundreds of billions into AI data centers. He specifically called out Oracle (NYSE:ORCL), Alphabet (GOOGL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Nvidia (NASDAQ:NVDA), asking a simple but uncomfortable question: when does this spending actually stop?
The numbers are eye-catching. The top four hyperscalers are expected to spend between $650 billion and $700 billion in 2026 alone, a massive jump from $381 billion in 2025. Burry argues that even with strong balance sheets, this kind of pace eats into free cash flow and forces companies to borrow or get creative with financing.
He’s also skeptical about accounting, suggesting depreciation could be understated by as much as $176 billion over the next few years. In his projections, Amazon could swing to negative free cash flow in 2026, and Alphabet’s FCF could shrink dramatically.
