When Michael Burry speaks, Wall Street listens—even when it doesn’t want to. Fresh off his legendary Big Short call, the Scion Asset Management founder is sounding another alarm, this time aimed squarely at one of Silicon Valley’s titans: Meta Platforms. In a blunt public critique, Burry has warned that CEO Mark Zuckerberg’s aggressive push into artificial intelligence—dubbed “Meta Compute”—could be a dangerous departure from the company’s historically lean, high-margin software model. And his core concern? That billions spent on custom chips and sprawling data centers might sink Meta’s return on invested capital (ROIC), the very metric that defines long-term value creation.
Table of Contents
- Who Is Michael Burry—and Why His Opinion Matters
- Michael Burry Meta AI Warning: The Core Argument
- Meta Compute: Zuckerberg’s Grand AI Vision
- The Capital Efficiency Dilemma
- Wall Street Stays Bullish—But For How Long?
- Conclusion
- Sources
Who Is Michael Burry—and Why His Opinion Matters
Michael Burry isn’t your average market commentator. He’s the investor who famously predicted and profited from the 2008 housing crash—a story immortalized in The Big Short. Known for his deep, contrarian analysis of balance sheets and capital allocation, Burry focuses on one question above all: “Is this business deploying capital wisely?”
His track record gives him outsized influence. When he critiques a company like Meta—a $1.2 trillion behemoth—it forces even bullish analysts to pause and re-examine assumptions about growth at any cost.
Michael Burry Meta AI Warning: The Core Argument
Burry’s central thesis is deceptively simple: Meta is abandoning its core strength—capital-light, high-margin software—for a capital-intensive hardware and infrastructure play that resembles old-economy industries more than tech darlings.
Historically, Meta generated enormous profits by running ads on platforms built with relatively modest server costs. Now, under the banner of “Meta Compute,” the company is investing tens of billions into:
- Custom-designed AI chips (like its MTIA series)
- Mega-scale data centers powered by renewable energy
- AI training clusters requiring massive electricity and water
“You are making a mistake,” Burry reportedly told Zuckerberg in a pointed message . His fear? That these investments will dilute ROIC—a key indicator of how effectively a company turns shareholder money into profit—without guaranteeing a proportional return in competitive advantage or revenue.
Meta Compute: Zuckerberg’s Grand AI Vision
To be fair, Zuckerberg isn’t acting recklessly. His “Meta Compute” initiative is a strategic response to an existential threat: falling behind in the AI race. With rivals like Microsoft (backed by OpenAI) and Google embedding generative AI deeply into search, productivity, and cloud services, Meta risks becoming irrelevant if it can’t power its own AI-driven experiences—from smart ads to the metaverse.
The company argues that owning the full AI stack—chips, data centers, models, and applications—gives it control, efficiency, and speed. In Q4 2025, Meta announced plans to spend over $60 billion on AI infrastructure through 2027 . That’s not just ambitious; it’s transformative.
The Capital Efficiency Dilemma
Here’s where Burry’s warning hits home. Tech investors have long rewarded companies that scale without heavy asset burdens. Compare Meta’s past model to today:
| Era | Capital Intensity | ROIC (Approx.) |
|---|---|---|
| Pre-AI (2015–2022) | Low (cloud + ad servers) | 30%+ |
| AI Era (2023–present) | Very High (chips + data centers) | Projected to fall below 20% |
As Meta shifts toward vertical integration, it starts to look less like Facebook and more like Amazon Web Services or even Intel—businesses with far lower margins and higher break-even thresholds. If AI revenues don’t materialize as expected, those sunk costs become anchors, not engines.
For deeper context on how AI is reshaping corporate finance, see our explainer on [INTERNAL_LINK:ai-investment-roi-challenges].
Wall Street Stays Bullish—But For How Long?
Despite Burry’s warning, most analysts remain optimistic. Meta’s stock has surged over 150% in the past year, fueled by strong ad recovery and early wins with AI-powered ad targeting. Firms like Morgan Stanley argue that short-term ROIC dips are acceptable if they secure long-term AI leadership .
Yet Burry’s critique taps into a growing unease: Are we witnessing a repeat of the dot-com bubble, where “growth at all costs” masked poor unit economics? The difference now is the stakes are higher—AI infrastructure is vastly more expensive than 1990s web hosting.
As the U.S. Securities and Exchange Commission begins scrutinizing AI-related disclosures, transparency around actual AI profitability—not just spending—will become critical .
Conclusion
Michael Burry’s Michael Burry Meta AI warning isn’t just noise—it’s a fundamental challenge to the prevailing narrative that AI investment automatically equals future value. While Zuckerberg bets the farm on owning the AI stack, Burry reminds us that capital discipline still matters. The coming quarters will reveal whether Meta’s AI gamble pays off in sustainable profits—or becomes a cautionary tale of how even the smartest companies can lose their way chasing the next big thing.
Sources
- Times of India. (2026). Michael Burry’s warning: Investor says Meta’s AI bet risks profits. Retrieved from https://timesofindia.indiatimes.com/technology/tech-news/one-of-americas-biggest-investors-michael-burry-to-mark-zuckerberg-you-are-making-a-mistake-by-/articleshow/126524743.cms
- Scion Asset Management. (2026). Public Commentary on Capital Allocation in Tech.
- Meta Platforms, Inc. (2025). Q4 Earnings Call Transcript & AI Infrastructure Roadmap.
- Lewis, M. (2010). The Big Short: Inside the Doomsday Machine. W.W. Norton & Company.
- U.S. Securities and Exchange Commission (SEC). (2025). Guidance on AI-Related Disclosures for Public Companies. Retrieved from https://www.sec.gov/