Michael Burry, famed for predicting the U.S. housing crisis and known as "The Big Short," has issued a warning that the current frenzy over artificial intelligence (AI) in the U.S. stock market increasingly resembles the final stages before the dot-com bubble burst.

In a post on Friday, Burry noted that during a long drive, he could scarcely hear financial television or radio discussing any topic other than AI. "It's nothing but AI, all day, every day. No one is talking about anything else," he remarked.

Burry believes the market's reaction to economic data has become increasingly illogical. Despite the U.S. consumer confidence index recently hitting a historic low, the market has chosen to ignore this risk, instead focusing on slightly better-than-expected April employment figures. On that same day, the S&P 500 index reached a new all-time high.

"Stocks are going up or down not really because of jobs or consumer confidence, but because they've been going up," Burry wrote.

He further stated that the market is currently caught in a frenzy, chasing gains around a "two-letter theme" that "everyone thinks they understand." This atmosphere reminds him of the market conditions in the final months of the internet bubble from 1999 to 2000.

Burry also compared the recent trajectory of the Philadelphia Semiconductor Index to its upward path just before the tech stock crash in 2000. Data shows the Philadelphia Semiconductor Index rose over 10% this week, bringing its cumulative gain for 2026 to 65%.

Over the past two years, massive capital has continuously flowed into AI-related stocks, driving major U.S. stock indices to repeatedly set new record highs. Semiconductor companies and large-cap tech stocks related to AI infrastructure and software have been the core drivers of this rally, with the generative AI boom further inflating market valuations.

Concurrently, prominent hedge fund manager Paul Tudor Jones has also drawn parallels between the current AI market and the dot-com bubble era, though he believes the bull market may still have room to run.

In a media interview this week, Jones stated the current market environment is "a lot like 1999," which was roughly a year before tech stocks peaked in early 2000. He anticipates the current AI-driven market could continue for another one to two years.

However, Jones also cautioned that if valuations continue to expand rapidly, the magnitude of a future market correction could be quite severe. "Think about it: if the stock market goes up another 40%, the market cap to GDP could be 300% or 350%. At that point, the eventual correction could be breathtaking," he said.