Michael Burry Still Doesn’t Understand Google’s AI Spending. Should You Ditch GOOGL Stock Here?

Michael Burry, the investor who famously foresaw the 2008 housing collapse, is back in the spotlight, and this time questioning the artificial intelligence (AI) spending spree by tech giants. He raised concerns over these players, including Alphabet (GOOG) (GOOGL) as to whether they can sustain massive investments in AI infrastructure without jeopardizing cash flow and earnings.

Burry’s worry is not abstract. Alphabet’s projected 2026 capital expenditures are set to nearly double last year’s levels to build data centers, procure AI chips, and scale its Gemini AI platform across Search and Cloud. He warns that such spending could collapse free cash flow (FCF), push companies into debt, and force complex accounting maneuvers to protect earnings. He questions when the end is in sight.