Michael Burry warns AI debt boom echoes 1999, citing Apollo data that 38% of high-yield issuance is AI-linked

Investor Michael Burry, known for shorting the 2008 housing bubble, warned in mid-May 2026 that the AI financing boom dangerously mirrors the 1999-2000 dot-com era, rejecting the argument that today's AI debt is 'cleaner.' Citing data compiled by Apollo Global Management chief economist Torsten Slok, Burry noted that about 38% of current high-yield bond issuance is now linked to AI, alongside 49% of investment-grade issuance and 87% of venture-capital funding. He compared that to 2000, when tech-media-telecom bonds were 40-50% of high-yield issuance and TMT was under 40% of VC funding—arguing the concentration is comparable or worse—and recalled that over $100 billion of investment-grade debt issued in 1999-2000 was downgraded to junk by 2002.

Burry tied the warning to specific frontier-AI structures, including the roughly $36 billion Apollo/Blackstone debt deal to buy Google TPUs for Anthropic, and described 'circular financing' patterns in the broader ecosystem—for example chip vendors recognizing full sale revenue while simultaneously investing sponsor equity back into the special-purpose vehicles buying the chips. The warning is significant for the MODELS beat because it frames the surge in compute and frontier-lab valuations (Anthropic at $965B, OpenAI at $852B) as potentially debt-fueled and reflexive rather than purely demand-driven, and because Apollo's own economist supplied the underlying issuance data.

Burry simultaneously disclosed adding to beaten-down stocks. The claims are an investor's interpretation of disclosed market data, not a consensus forecast; AI proponents counter that today's leaders generate large, fast-growing revenue.