Michael Burry Criticizes AI Circular Financing After Google Earnings, Cites $500B Circular Deals

According to Maeil Business Newspaper, Michael Burry criticized AI industry circular financing practices on July 23 following Google's earnings release. Burry, citing BIS data, stated that of $800 billion in forward-contracted AI research and development spending through April 2026, approximately $500 billion represents circular financing. He noted that hyperscaler revenue exceeding $600 billion is more than half-driven by such arrangements, while semiconductor chipmakers' revenues are largely composed of circular transactions. Burry also highlighted that AI companies' long-term debt has surged beyond $300 billion, reaching a decade high, while credit default swap spreads for AI firms are widening—indicating market concerns over potential defaults.
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