JPMorgan Chase disagrees with Michael Burry's bearish outlook on artificial intelligence, arguing that the AI ecosystem requires approximately $650 billion in annual revenue to achieve a 10% return over five years, which represents about 0.58% of global GDP. JPMorgan believes that corporations, as the primary beneficiaries of AI-driven productivity gains, will absorb most of these costs through efficiency improvements rather than passing them on to consumers via fees.
The bank projects significant capital expenditures in AI infrastructure like data centers and chips, driven by real-world adoption and rapid technological advancements, creating a cycle of investment, innovation, and revenue growth. While JPMorgan's report did not directly name Michael Burry, its optimistic assessment of AI's economic potential and projected growth directly counters his recent bearish bets against AI-related stocks like Nvidia and Palantir.
Burry, famous for predicting the 2008 housing market collapse, recently closed his Scion Asset Management fund, citing his struggle to comprehend AI-driven valuations and expressing frustration with the current market's "irrational exuberance." This move suggests he views shorting AI stocks as increasingly risky, potentially acknowledging that the underlying demand for AI technology is substantial and persistent.
