The ”Perimeter of Debt”.
Burry just added to his four biggest shorts and compared today’s market to 2005 — right before the mortgage crisis.
His latest warning: the debt the market may not be counting.
After building bearish positions across semiconductors and some of the market’s biggest AI names, he added again this week — including to Nvidia, Palantir, Oracle, Caterpillar, and SOXX.
Then he brought up 2005.
His concern goes deeper into the AI supply chain — long-term leases, purchase agreements, power contracts, and other commitments that companies may be taking on today to secure tomorrow’s capacity.
Burry has a name for it: The “perimeter of debt.”
And the timing makes his argument particularly interesting.
Because while Burry is warning about what sits underneath the AI buildout, some of the companies he’s betting against are reporting extraordinary demand.
One of them just grew revenue 454% and jumped 26%.
So who’s reading the AI boom correctly?
Here is the story.⇩
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Phase 2 of the AI Supercycle Has Arrived
Google’s DeepMind CEO says AI will be “10X bigger than the Industrial Revolution. And maybe 10X faster.”
Best-selling financial author Alexander Green has identified three companies positioned to soar.
He was right about Apple. In 1996. Under $1 a share.
He was right about Netflix. At $1.62.
He was right about Amazon. Under $2.
He warned his readers about the dot-com crash. One month before it peaked.
He warned about the housing crisis. Nine months before Lehman Brothers collapsed.
Now Alexander Green says the biggest wealth-creation event of his 40-year career is unfolding right now.
He calls it Phase 2 of the AI Supercycle.
And he’s identified three stocks he believes could dominate the next phase.
What He Added?
Burry has been building this bearish view for weeks, and this week’s moves show his conviction is growing.
He described Nvidia NVDA ( ▲ 2.85% ) , Palantir PLTR ( ▼ 2.42% ) , and Oracle ORCL ( ▲ 5.03% ) as his three largest shorts, then increased bearish exposure elsewhere across the AI buildout.
Caterpillar CAT ( ▲ 2.58% ) may be the most revealing of the group.
Burry increased his short at $844 with a simple explanation: “Data center plans are already aging.”
✱ That pushes his argument beyond chips and software. He’s now expressing the same concern across the physical infrastructure supporting the AI expansion — from semiconductors to data centers and the equipment used to build them.
The short book is starting to look less like a collection of stocks and more like one big bet on the AI buildout.
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What’s “Perimeter of Debt”?
Burry says his upcoming research takes “a wider interpretation of liabilities.”
The basic idea: a company can take on obligations that behave a lot like debt without ever calling them debt.
His focus is on the enormous long-term commitments being made across the AI buildout. Data centers and AI companies are locking themselves into contracts for chips, power, compute capacity, and other infrastructure — sometimes years in advance and with no easy way to cancel.
→ Those commitments may not appear as traditional borrowings on the balance sheet.
But Burry’s argument is that the risk is still there.
If a company commits to spending billions over the next several years and can’t walk away from the contract, that obligation starts behaving a lot like debt — whether accounting rules label it that way or not.
That’s what he means by expanding the “perimeter of debt.”
Instead of looking only at how much traditional debt a company carries, Burry wants to draw a much wider circle around its obligations — including contracts, purchase commitments, leases, backstops, and other promises that could become painful if demand slows or the AI buildout gets pulled back.
And that’s why he says circular financing isn’t really the issue.
Burry’s argument asks how much money companies have already committed to spending — whether it’s officially called debt or not.
His concern is what happens if the boom reverses while all those commitments are still there.
!!! “Perimeter of debt” → How much debt-like risk exists across the AI supply chain, including obligations that don’t appear as traditional debt.
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Burry’s Two Historical Parallels↓
1 2005-06
Goldman Sachs held a $3 billion complex mortgage position that looked dangerous enough to threaten the system — right around when Burry made his famous housing short. Goldman managed to offload the position. Once it did, other banks, including Merrill Lynch, loaded up on similar risk in 2006 — risk that helped destroy them two years later. Burry’s point: one firm exiting doesn’t mean the risk disappeared. It just moved to whoever was willing to buy it next.
2 Enron
Burry says today’s dynamic has “shades of Enron’s effort to make wholesale power an investable class” — a reference to Enron’s attempt to turn ordinary electricity trading into a tradeable, packageable financial product, years before its collapse exposed how much hidden leverage and accounting manipulation was underneath that effort.
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So Far, The Scorecard Is Split.
On the surface, that’s an even split: two stocks moving against the bearish view, two moving with it.
But YTD performance isn’t Burry’s actual P&L.
He entered these positions at different prices, at different times, and in some cases through puts with specific strikes and expirations.
So this isn’t really a 2–2 win-loss record.
→ It’s a snapshot of something more interesting: the same AI buildout Burry is betting against is already producing very different outcomes across the stocks tied to it.
Meanwhile, Retail Has Picked A Side.
Burry’s skepticism isn’t getting much company from retail traders.
Three of the four names lean bullish among retail traders, including Palantir, where Burry has been increasing both his put exposure and direct short position.
✱ Oracle is the exception. It’s the only name where retail sentiment currently points in the same bearish direction as Burry’s trade.
So while Burry keeps adding to the bearish side of the AI buildout, retail is mostly standing on the other side.
Burry Is Buying Too…
✱ For all the attention on his shorts, Burry still has plenty of conviction on the other side of the market.
He added to Molina Healthcare $MOH ( ▲ 4.62% ) at $198, bringing the position back in line with some of the largest holdings in his portfolio. Burry said its relative weight had fallen because of other capital movements — not because his view of the company had changed.
His outlook remains long-term bullish, with one additional wrinkle: Burry said the current political season may be developing favorably for Molina, calling it a “nice surprise.”
He didn’t elaborate on exactly which policy developments he was referring to.
So while Burry is adding to shorts across the AI buildout, he’s also putting more capital behind one of his highest-conviction longs.
Bearish on the buildout. Still very willing to buy elsewhere.
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