‘The Big Short’ Investor Michael Burry Says AI Is Hitting Blue-Collar Jobs, Google Is Pulling Ahead And Nvidia Just Got ‘Lucky’

In an interview with The Substack Post, Burry said trade careers may not be as AI-proof as some people seem to think.

• Burry noted that the AI shift differed from prior technological revolutions due to the lack of upskilling surrounding it.
• According to Burry, Google is ahead of Amazon and Microsoft after it seems to have gotten rid of its “search inertia.”
• He also noted that Nvidia’s advantage won’t last, and Palantir’s valuation is hinged on its marketing. 

“The Big Short” investor Michael Burry, known for calling the subprime mortgage crisis, said on Friday that artificial intelligence is already reshaping blue-collar work and household economics in ways that markets may be underestimating.

In an interview with The Substack Post, Burry said trade careers may not be as AI-proof as some people seem to think. "If I’m middle class and am facing an $800 plumber or electrician call, I might just use Claude. I love that I can take a picture and figure out everything I need to do to fix it."

He noted that this marks a shift from past technological revolutions. “In the past, for instance, during the Industrial Revolution and the Services Revolution, the impacts on labor were so great that mandatory schooling was instituted and expanded to keep young people out of the labor pool for longer. We certainly have not seen anything like that,” Burry said.

Google Is Winning

While still skeptical of the AI trade, Burry said Alphabet (GOOG/GOOGL) subsidiary Google is ahead of rivals such as Amazon (AMZN) and Microsoft (MSFT). “From what I’m hearing, Google is winning among developers from both AWS and Microsoft. And it seems the ‘search inertia’ has been purged at the company,” he said.

Burry noted that Google’s advantage has always been cost. He noted that the company could run large amounts of informational searches, where it may not necessarily earn revenue, and still not face a substantial loss. According to the company’s third-quarter (Q3) earnings, it has around $98 billion in cash and cash equivalents.

“I think this is the fundamental problem with generative AI and LLMs today—they are so expensive. It is hard to understand what the profit model is, or what any one model’s competitive advantage will be—will it be able to charge more, or run cheaper,” he asked Anthropic co-founder Jack Clark and host Patrick McKenzei on the podcast. “Perhaps Google will be the one that can run cheapest in the end, and will win the commodity economy that this becomes.”

Alphabet’s stock edged 0.23% higher in Sunday’s overnight trade after clocking a record intra-day high of $331.48 on Friday. It pared gains and closed out the day at around $329. Retail sentiment around the company on Stocktwits remained in ‘bullish’ territory over the past day, with chatter at ‘high’ levels.

The ‘Poster Children’ For AI

Burry said Nvidia (NVDA) and Palantir (PLTR) were the "luckiest" companies in the sector and that the market’s wrong about them. “They adapted well, but they are lucky because when this all started, neither had designed a product for AI. But they are getting used as such,” he said.

According to him, Nvidia’s advantage won’t last, and Palantir’s valuation is hinged on its marketing. “He’s [Palantir CEO Alex Karp] marketing as hard as he can to keep this going, but it will slip. There are virtually no earnings after stock-based compensation,” Burry said.

Nvidia’s stock traded flat on after-hours trade on Sunday after notching 0.1% lower on Friday. Retail sentiment around the stock fell to ‘bullish’ from ‘extremely bullish’ territory over the past day, even as chatter remained at ‘high’ levels. Palantir’s stock was also trading flat in overnight trade. Retail sentiment around the company remained in ‘bullish’ territory amid ‘high’ levels of chatter over the past day.

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