'Big Short' Investor Warns: AI Bubble Will Trigger Market Crash

So, what do you do overall? It's more complicated, but you wouldn't necessarily short this market at this point, would you? >> I would not. I I've lightened up. I've taken you know, I'll give you an example. I I sold my Google couple of months ago. Um I've owned Google I can't even tell you how long I've owned Google. Um but I felt I did I wanted to reduce my exposure to AI. I haven't bought anything to replace it cuz you know, buying something defensive or stapley is kind of a waste of time. >> Why? >> It doesn't go up. They don't go up. They you know, people either want to buy AI or they don't want to buy AI, but they don't want to shift out of it to buy Clorox. >> So, if this is a binary situation where AI succeeds and the market continues to push higher and higher >> Correct. >> What happens if AI doesn't succeed? >> I think we have a big correction. >> How big? >> Now, now that's a hard question. I don't know. But I mean, it's all one trade. It's literally one trade. I mean, even people who who think they're diversified because they own 60% stocks and 40% bonds are missing the fact that they're actually not diversified because of their 60% more than 50% is of it is is tech and AI related. And of the 40% of bonds, most of the new issuances of bonds is AI related. So, even people who think they're diversified because they they own bonds are not really that diversified. It It What What scares me is that it's all one trade. So, it better succeed. >> What are you doing if you've sold Google? What else I mean, if you sold Alphabet, what else have you done? >> I'm just sitting in you know, I have I have cash. And so I can try and figure out what to do. >> What would it take to get you to deploy that cash? >> I don't know yet. I really don't. I mean I don't think this debate's going to get settled within the next 2 weeks. >> We talk all the time about the Middle East because you can say AI is driving everything, but you could also say oil prices are driving everything right now, too. Um Oil prices are down 8%. You see the markets up. >> Right. >> Significantly. How much does that factor into it? Do tariffs factor into it? >> I think it factors it to to a degree. I don't think this war is going to be over anytime soon. I don't think. I mean, I think President Trump wants the Iranians to give up their their nuclear fuel, and the Iranians are not going to give up their nuclear fuel. So I don't think there's much to talk about. So, you know, we get these lulls, but then it doesn't do anything. >> But you're not worried about oil prices at this point. >> I think actually there's an oversupply. >> Yeah. >> That's why the um I mean, who was a guest on my show, too. Um You know, pointed out that China has basically stopped buying oil, which is why oil prices haven't gone up that much. You know, you would have thought oil prices would be 150 at this point, but they're not because there's actually an over overproduction. And I also think some of these these pipelines that are going to be able to avoid um the straight are pretty close to being finished. >> Yeah, next year I think maybe 2027 >> Yep. >> is when you hear >> That's why oil prices I'm not really all that worried about oil prices. >> I mean, AI is going to be something. I don't I don't I'm like you, I'm not I'm not sure what, but does the it for lack of a better term, the bubble popping, does it does it come from people slowing down on the buildout, or does it come with the promise of what it's supposed to do disappointing people? >> I don't necessarily think the latter. >> It's going to It's going to be It's going to be amazing. It's going to be It's going to be something. Something really good. That doesn't mean that everybody succeeds. >> Yeah. >> That doesn't mean that you have circular deals. The latest Nvidia deal like you got to read it and it's like they're going to you know back this but then they're going to provide money for opening AI to buy their chips and it's so incestuous. >> It's convoluted. >> It's totally convoluted. You don't know if there's any You know, you don't know if there's any real profitability in in any of of the machinations that you you eventually [clears throat] >> There probably is for Nvidia. Like who was saying probably >> Well, there was yes for Nvidia. They're not doing it for free. >> Right. >> But look I again I think one of the bottlenecks is that Anthropic and AI and Open AI are responsible for a lot of the spending that people are doing. >> Right. >> And Anthropic and AI have models that are now much more expensive than the competition. And I think that is a potential bottom. >> I'm a much better cook because of AI and and and you are. Yes. >> Huh? >> And griller. >> Okay. >> When I grill things on a much I mean far better. Everything is juicier, tastes better. I do it a totally different way. I'm using the grill that has different zones if you need to. >> for any of that. >> No, I use just a I I don't I don't pay. >> Free. >> Right. But they he's very very nice to me and and >> Beat him into submission. >> Maybe so. No, Claude is like so how was your you know how was your boneless breast of chicken? It was unbelievable Claude. Thanks. He was any any time.