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...

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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.

India’s Dilemma: The Specter of a Three-and-a-Half-Front War

Commodore S.L. Deshmukh

Jan 1, 2025

4 min read

Updated: Jan 2, 2025

In the first of a two-part series, we examine India’s growing security challenges, both internal and external, and the strategic steps needed to navigate these complexities

The world is a powder keg. Unrest in Iran, Iraq, Israel, Syria, and across the Middle East coincides with the protracted war between Russia and Ukraine. These crises ripple across borders, leaving no country untouched. For India, the stakes are particularly high. In Asia, tensions with Bangladesh and Pakistan, coupled with an unresolved standoff with China, exacerbate an already precarious security environment. Adding fuel to the fire, domestic challenges further intensify the risks, raising the alarming possibility of what strategists dub a “three-and-a-half-front war.”

India’s geographical location offers both an advantage and a disadvantage. Strategically positioned as a hub for global logistics, the country is critical to ensuring regional stability. Yet, its proximity to two longstanding adversaries—China and Pakistan—complicates matters. Bangladesh, with its shifting allegiances, has added a new dimension to this calculus. The volatile domestic situation, marked by communal and political unrest, completes the trifecta, with internal challenges forming the “half front” in this ominous scenario.

Indo-China relations have long tested India’s diplomatic mettle. For decades, China has pursued a strategy to keep India on edge, using a mix of psychological and military provocations. Rooted in its desire to avenge the ‘Century of Humiliation,’ China’s worldview is deeply shaped by a need to dominate its regional neighbours.

India’s rapid ascent on the global stage poses a direct challenge to China’s ambitions of regional and global supremacy. Beijing views New Delhi’s rising stature with unease, particularly its growing influence in the Indo-Pacific, its robust infrastructure along contested borders and its leadership in multilateral forums like the Quadrilateral Dialogue (QUAD). The refusal to join initiatives like the Belt and Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP) has further strained ties.

The 2020 Galwan Valley clash, a tragic flashpoint in Indo-China relations, epitomized China’s aggressive designs. Beijing’s displeasure with India’s border infrastructure development and its closer ties with Western allies has only fuelled its belligerence. Militarily, China holds the upper hand, leveraging its advanced arsenal against India’s aging defence systems. This disparity emboldens Beijing to test India’s resolve repeatedly, creating a perpetual state of tension.

Beyond its direct provocations, China’s deepening ties with South Asia complicate India’s security calculus. Bangladesh, once a trusted ally, now edges closer to Beijing. Economic investments through the Belt and Road Initiative, strategic military partnerships, and increased political engagement hint at a significant shift in Dhaka’s priorities. While India continues to invest in its ties with Bangladesh, the growing influence of China in the region presents challenges that are impossible to ignore.

Since Partition in 1947, India and Pakistan have shared an acrimonious relationship. Pakistan’s grievances, from the creation of Bangladesh to its inability to annex Kashmir, have defined its hostile posture toward India. While India’s economic growth and diplomatic successes have widened the gulf, Pakistan continues to rely on asymmetric warfare through state-sponsored terrorism.

India has responded firmly with cross-LoC strikes and diplomatic efforts like pushing Pakistan onto the FATF grey list. However, Islamabad’s deepening ties with Beijing, including advanced weapon supplies, have strengthened its military, forging a troubling China-Pakistan nexus. This partnership, with potential strategic collaboration in Siachen and Ladakh, poses a serious challenge to India, raising concerns of a coordinated assault from both adversaries.

Bangladesh, once a close ally, now emerges as a wildcard in India’s security landscape. While the two countries share historical ties rooted in India’s role during Bangladesh’s liberation, recent developments suggest a drift. Dhaka’s growing economic partnership with Beijing and its reluctance to fully endorse India’s regional leadership underscore this shift.

China’s significant investments in Bangladesh’s infrastructure, ranging from ports to power plants, mirror its strategy in other South Asian countries. For India, this growing influence represents not just an economic challenge but a strategic one. The possibility of Bangladesh aligning with China in regional disputes adds another layer to India’s external threats.

The Domestic ‘Half Front’

India’s security challenges are compounded by internal issues like communal tensions, political polarization, and insurgencies in Kashmir and the Northeast, which strain resources and create exploitable vulnerabilities. Kashmir remains a flashpoint, with unrest offering Pakistan opportunities to stoke proxies, while Northeast insurgencies require constant vigilance. To counter the threat of a coordinated three-front assault, India must recalibrate its security policy with investments in defence modernization, strong alliances, and diplomatic finesse.

Modernizing the armed forces, with a focus on indigenization and reducing dependence on foreign suppliers, is imperative. Simultaneously, India must strengthen its regional partnerships, leveraging platforms like the QUAD and the Indian Ocean Rim Association to counterbalance China’s influence. Engaging with Bangladesh to rebuild trust and counter Beijing’s narrative will be equally crucial.

A united and resilient nation is less susceptible to external manipulation, ensuring that the ‘half front’ does not become a full-blown crisis. The challenges are formidable, but so too is India’s resolve.

(The author is a retired Indian Naval Aviation Officer and a geo-political analyst.

(In Part Two tomorrow, we focus on Bangladesh’s potential to emerge as a third front in the conflict, explore how India’s domestic situation constitutes a ‘half front’ and examine key remedial measures India must adopt to mitigate the threat)

The Great Contrarian

India’s Dilemma: The Specter of a Three-and-a-Half-Front War

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