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By:

Kiran D. Tare

21 August 2024 at 4:53:13 pm

The Great Contrarian

Michael Burry made his reputation by seeing through the housing boom. Now he is turning his scepticism on AI by questioning the stories being told about it. Michael Burry has always had an uncomfortable relationship with consensus. When everyone else sees a boom, he tends to look for the balance sheet underneath it. Recently, when some of the globe’s most powerful executives began telling the public that Artificial Intelligence is something is both enormously valuable and dangerously...

The Great Contrarian

Michael Burry made his reputation by seeing through the housing boom. Now he is turning his scepticism on AI by questioning the stories being told about it. Michael Burry has always had an uncomfortable relationship with consensus. When everyone else sees a boom, he tends to look for the balance sheet underneath it. Recently, when some of the globe’s most powerful executives began telling the public that Artificial Intelligence is something is both enormously valuable and dangerously powerful, Burry’s instinct was to wonder who benefits from the story. Burry’s instinct – of saying directly that the Emperor has no clothes – has made him famous. As the physician-turned-investor immortalised in 2015 film The Big Short, Burry was one of the investors who saw the fragility of America’s housing market before the financial crisis of 2008. While Wall Street was busy packaging subprime mortgages into increasingly elaborate securities, he concluded that the loans were deteriorating, lending standards were weakening and house prices could not keep rising simply because the financial system assumed they would. This month, as some of the world’s most prominent AI executives began warning that the technology could produce catastrophic consequences unless its development was slowed, Burry again took aim at the argument. In a post on his Substack, Cassandra Unchained, he described the warnings from OpenAI’s Sam Altman, Anthropic’s Dario Amodei and Elon Musk as “self-serving” and suggested that the language of impending catastrophe was serving a very different purpose from public safety. Burry pulled no punches when he said that the technology’s boosters and its doomers can sometimes be selling the same product. Burry’s suspicion is that the more extraordinary AI appears, the more extraordinary its valuations become. The same behemoths then warn that AI development must be slowed, gain time and protection from their competitors. Burry’s suspicion is particularly pointed because OpenAI and Anthropic have been moving towards possible public listings at enormous valuations. Inc. reported his argument on September 16, noting his contention that AI safety warnings could provide “cover” for slowing growth and postponing IPO plans. Burry’s provocative formulation is that large language models are not themselves artificial general intelligence, and the industry’s rhetoric about slowing “AI” therefore risks confusing a specific class of technologies with a much broader hypothetical future. The current AI debate has increasingly acquired the language of science fiction when it speaks of machines that might escape human control and autonomous systems that might manipulate infrastructure. While such scenarios deserve examination, Burry asks a more mundane question: what if the companies issuing the warnings have commercial incentives that are being overlooked? It is a question characteristic of the man who became famous by reading the footnotes while everyone else watched the headline. Burry’s scepticism toward AI is not new. Since launching Cassandra Unchained in November 2025, he has made the economics of the AI boom one of its central subjects. His writings have examined what he calls “supply-side gluttony”, the enormous investment in AI infrastructure and the financial assumptions underlying the industry. He has also taken short positions against several beneficiaries of the AI boom, including Nvidia and Palantir, arguing that the market may be pricing in too much future success. In one series, The Heretic’s Guide to AI’s Stars, he has examined the accounts of Nvidia and the major hyperscalers, focusing on capital spending, financing arrangements, customer concentration, depreciation and other details that can disappear beneath the headline numbers. His argument is not simply that AI companies are overvalued. He sees familiar patterns in the rush to build infrastructure before the economic returns have been established. In June, he wrote that he had seen something similar before and compared the current AI capital flows with the exuberance of the late 1990s. Burry’s reputation has not been built on predicting every future development. Rather, it was built on being willing to ask whether the story everyone else was telling was supported by the evidence. The housing crisis taught investors that financial innovation could conceal old-fashioned bad lending. The AI boom may yet teach markets that revolutionary technology can coexist with inflated expectations and extraordinary valuations. Burry’s great talent is refusing to accept the present at face value. In a market increasingly dominated by grand claims about machines that will either save civilization or destroy it, that may be the most contrarian position of all.

A Victory of Democracy & Rejection of Caste Appeasement, Separatism

Oct 10, 2024
3 min read

Updated: Oct 22, 2024

Democracy

Defying all anti-incumbency predictions, the Bharatiya Janata Party (BJP) pulled off a stunning victory in the Haryana Assembly election while performing creditably in Jammu and Kashmir, which saw the triumph of the National Conference, in alliance with the Congress. Most striking is the transformation in the hitherto strife-torn Jammu and Kashmir, which witnessed its first election since the abrogation of Article 370 by the Narendra Modi-led Central government in 2019.


There, a record voter turnout outpaced even that of Mumbai, and the election was conducted without a single instance of stone-pelting - an almost unthinkable scenario in previous years.


The significance of the peaceful election in Jammu and Kashmir cannot be overstated. Separatist forces, long the dominant voice of discontent in the region, were conspicuously rejected by the electorate. Their defeat signals a broader rejection by the electorate of the old guard’s divisive rhetoric, which often centered on demands for dialogue with Pakistan. Omar Abdullah, leader of the National Conference and victor in the election, notably shifted his message from one of engagement with Pakistan to a call for the restoration of statehood—an evolution in discourse that reflects a desire for democratic self-determination rather than external mediation.


This change is a welcome development, suggesting that even within traditional political circles, the appetite for separatist posturing is waning.


In Haryana, the BJP’s historic hat-trick win underscores a critical lesson for all political parties across India: the futility of excessive reliance on appeasing one single caste to the exclusion of others.


The Congress’s failed strategy of wooing the Jat community at the expense of a broader, more inclusive appeal backfired spectacularly. The BJP, by contrast, managed to unite diverse sections of the electorate, including farmers, soldiers, and athletes - three groups that historically hold sway in Haryana, symbolized by the slogan ‘Kisan, Jawan, Pehalwan’ (Farmer, Soldier, Wrestler).


The anticipated ‘farmer rage’ in the wake of the controversial agricultural reforms did not materialize, debunking predictions that rural discontent would sink the BJP’s chances.


The Congress’s inability to attract Dalit voters, combined with its overdependence on caste appeasement, proved a fatal miscalculation.


Now, one hopes that instead of some introspection, the Congress will not resort to its familiar complaints, such as claims of manipulation with electronic voting machines (EVMs). They should realize that such grievances are likely to ring hollow with an electorate that turned out in large numbers, signalling broad faith in the democratic process.


A particularly shrewd move by the BJP was the decision to grant parole to controversial religious leader Baba Ram Rahim, a figure with a vast following in Haryana. This manoeuvre, while criticized by some, likely played a role in mobilizing a critical bloc of voters in the BJP’s favour. The party’s mastery of local dynamics, along with its ability to connect with key influencers, continues to set it apart from its competitors.


The BJP’s leadership choices also proved crucial. While incumbent Chief Minister Manohar Lal Khattar was no doubt a capable administrator and a dyed-in-wool party loyalist, his perceived arrogance had begun to alienate sections of the electorate and party workers. The BJP’s decision to elevate Nayab Saini, a more down-to-earth and approachable leader, proved to be a masterstroke.


Saini’s grassroots appeal and tireless outreach efforts resonated deeply with voters, providing the BJP with the human touch that Khattar, for all his technocratic prowess, lacked. With virtually every exit poll predicting gloom and doom for the BJP in Haryana, the party demonstrated that leaders like Nayab Saini can win elections by forging strong bonds with the grassroots and offering a message of inclusion rather than division.


The BJP’s electoral success in Haryana holds lessons for other states, particularly Maharashtra. In many ways, Khattar’s case should hold a mirror for Devendra Fadnavis, another highly capable leader but whose style of functioning is perceived to be authoritarian and domineering rather than inclusive.


Yet, unlike Haryana, the BJP thus far has found no Nayab Singh Saini equivalent in Maharashtra - a gap that could pose challenges for the party’s prospects there.


Another crucial takeaway is that the Congress over-focus on Jat appeasement in Haryana ought to make the ruling Mahayuti coalition in Maharashtra wary about kowtowing too much to the Maratha community. As the Haryana elections demonstrate, such strategies offer diminishing returns. The BJP’s triumph was built on its ability to appeal to a broad cross-section of voters, grounded in promises of development, stability, and national pride rather than pandering to specific communities.


The results also offer a simple and powerful maxim for future electoral battles of any political party, be it the BJP or the Congress. And that is stay connected, stay grounded, be humble, and be polite. Then you can win any election, no matter what the pundits predict!

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