‘Big Short' Michael Burry reveals what's behind the latest market crash

• Microsoft and Amazon stocks led 'Magnificent 7' declines, with Amazon falling 13.43% from $242.96 to $210.32 between February 2-9, despite mostly strong earnings results
• AI infrastructure concerns intensified as data center buildouts face electricity shortages, water supply issues, and estimates suggesting up to 50% of facilities could remain dormant due to mismatched capacity and demand
• Nvidia announced gaming chip production cuts due to global memory shortages, highlighting strain on the semiconductor supply chain that previously fueled its core business before the AI boom

Summary

Key Development: Michael Burry, famed "Big Short" investor, attributed the early February 2026 market sell-off to "historic overvaluation, historic capital expenditures, and tiny 'AI' revenue" in a February 9 X post, countering narratives that blamed Anthropic AI news.

Market Impact: The first week of February 2026 saw significant losses across financial markets:

• Microsoft (MSFT): Stock declined amid slowing growth and margins dropping to multi-year lows, despite strong earnings. Heavy dependence on OpenAI exposed, whose ~$20 billion revenue pales against massive capital expenditure commitments.
• Amazon (AMZN): Fell 13.43% from $242.96 to $210.32 (Feb 2-9), despite strong results. AWS growth remains heavily dependent on AI infrastructure investments.
• Legal/Publishing Sector: Relx PLC (RELX) dropped 18% weekly on misinterpreted Anthropic news.
• Nvidia (NVDA): Experienced losses and announced halted gaming chip production due to global memory shortages.

Core Issues Identified

• AI Revenue Mismatch: Massive capital expenditures on AI infrastructure vastly exceed actual revenue generation
• Data Center Concerns: Estimates suggest up to 50% of data centers could remain dormant due to mismatched hardware production, electricity availability, and demand
• Infrastructure Strain: Data center construction triggering power grid stress, water shortage fears, and community backlash leading to project cancellations since late 2025
• Semiconductor Shelf Life: Unlike traditional infrastructure, advanced semiconductors have short useful lifespans, making overbuilding particularly problematic

Broader Implication: Burry's analysis suggests the sell-off reflects fundamental concerns about AI investment sustainability rather than specific news events, affecting multiple "Magnificent 7" tech companies.