Michael Burry says neither SpaceX nor Anthropic is worth $1T
Skepticism is mounting over talk of $1 trillion valuations for SpaceX and AI firms like Anthropic, with many arguing that current revenues, high operating costs, and thin moats don’t justify such prices. Commenters warn that passive index funds and new fast-track index inclusion rules could force pension money into overvalued IPOs, effectively turning them into wealth transfers from everyday investors to early insiders. Others counter that AI could become as fundamental as past tech revolutions and might eventually support huge valuations, but concede that timing, competition, and hardware costs make the outcome highly uncertain.
Valuation of Anthropic and SpaceX
- Many agree the article’s short-seller is likely right that neither firm fundamentally merits a $1T valuation today.
- Others argue Anthropic could justify $1T if AI becomes an essential work utility with hundreds of millions of paid seats, but admit that’s a speculative best-case.
Moats, Competition, and AI Economics
- Several see weak moats for LLM providers: you’re only “as good as your latest model,” with multiple high-quality competitors and much cheaper open or foreign models.
- Counterpoint: enterprise contracts, integrations, and conversation history create strong inertia; large orgs won’t switch easily unless savings are massive.
- Concerns that if GPU suppliers diversify or cheapen, margins and valuation power for model vendors will erode.
Revenue, Profits, and Valuation Metrics
- Dispute over Anthropic revenue: numbers like $4.5B in 2025 and bigger extrapolations are cited but treated with skepticism.
- Repeated point: current or rumored revenue and negative/fragile profitability do not justify 20x+ sales or 0.2% earnings yield.
- Some emphasize traditional P/E and a clear path to sustainable profit; others think “growth story” valuations dominate anyway.
Passive Investing, Index Rules, and Systemic Risk
- Strong criticism of index rules that would force rapid inclusion of huge IPOs into major indices within days.
- Fears this creates a wealth transfer from pensions/ETFs (forced buyers at any price) to pre-IPO insiders.
- Concern that high index concentration and passive flows decouple prices from fundamentals and make the system fragile.
Market Behavior, Bubbles, and Timing
- Many see AI, like dotcom and memestocks/crypto, as a bubble driven by zero/low rates, hype, and “vibes.”
- Recurrent theme: markets can stay irrational longer than skeptics stay solvent; betting against AI hype or mega-cap tech has been ruinous in recent years.
- Some think an eventual crash is inevitable and large, others note prior “booms” (internet, railroads) left lasting value despite crashes.
AI Adoption and Personal Investing Responses
- Mixed views on AI as “essential utility”: some daily heavy users say cheap models already suffice; others see transformative productivity.
- Several commenters are actively shifting out of broad US indices or reducing exposure, preferring more “stable” or custom direct-index portfolios that can exclude AI/high-flyer names.