“The Big Short“ investor Michael Burry has a China warning for the US. Burry, one of the most influential Wall Street investors, has warned that America’s reliance on power-hungry Nvidia chips will hand China victory in the artificial intelligence (AI) race. In a recent post shared on the microblogging site X (formerly Twitter), he pointed to a widening energy production gap that he argues makes America’s current AI development strategy unsustainable. Sharing a chart comparing energy production growth across regions, Burry wrote that China’s advantage extends beyond total power capacity to the rate of acceleration, while US transmission grid development is actually decelerating due to permitting issues, even as China builds transmission infrastructure freely to match its expanding power output. In his X post, Burry shared a chart showing how China’s energy production has increased drastically compared to the US and the EU. He wrote: “Why China will win AI in one chart. Power hungry Nvidia chips are not the way forward for the U.S. It is not just the total power advantage. It is the slope.”
Why ‘The Big Short’ investor thinks Nvidia’s AI development roadmap is not right for the US
The hedge fund manager argues that Nvidia’s development strategy is essentially a power-consumption roadmap, with innovation focused on powering and cooling larger, hotter silicon as efficiency gains fail to keep pace with compute density. According to Burry, this creates a structural problem for American companies pouring capital into what he characterises as “a race it is structurally positioned to lose.” He also suggests that the US must pivot away from increasingly power-intensive chips toward AI-tuned ASICs instead. He believes that this transition is being hindered by Nvidia’s influence through investments and agreements with major US AI companies and startups.
Replying to his initial post, Burry wrote: “My post here was inexact. My post elsewhere was more complete, below. This chart shows why China will win if Nvidia’s chips are the way forward. Nvidia’s development roadmap is essentially a power consumption roadmap. and innovation is just figuring out how to power and to cool bigger, hotter silicon. Power needs keep climbing because efficiency gains cannot keep up with compute install. This chart shows that is not a path to victory for the U.S.Not only is China way ahead, it will continue to press its advantage – the slope is the key. That is acceleration of power generation development. US transmission grid development is actually decelerating due to permitting issues while China is building transmission at will to match power output. In fact, to the extent this is an AI arms race, US companies are plowing capital into a race it is structurally positioned to lose. So it cannot be an AI arms race, if the US can help it.The US needs to get away from bigger and bigger power hungry chips and innovate with AI-tuned ASICs like nobody’s business. Nvidia has a death grip on development through its investments and agreements with so many important US AI companies and startups.DOJ Antitrust is investigating and should act, but Trump probably stops that. It is left to the market to figure out LLMs are not the way to AGI or ASI, and stop feeding the beast. Can our biggest companies make the pivot?”
