Michael Burry Warns of US Stock Flash Crash as Quant Funds Fuel AI Chip Selloff

Michael Burry, the investor who rose to fame for predicting the 2008 subprime mortgage collapse and was later portrayed in "The Big Short," has repeatedly warned that US equities face a flash-crash risk. Burry argues that Wall Street quantitative funds automatically trigger algorithmic deleveraging when volatility spikes, and that expanding sell-offs can cascade into forced liquidations, creating a self-reinforcing downward spiral. Because AI chip and hardware stocks such as Nvidia, Micron and Broadcom now carry outsized index weight after their recent rally, they are seen as the most exposed to any systematic quant unwinding, with potential spillover into Taiwan's semiconductor supply chain.

Burry recently renewed his warning, saying US stocks could replay a 1987-style Black Monday crash driven by automated quant selling. Bloomberg's opinion column pushed back, arguing the perennial bear has been "wrong more often than right" on past short calls, casting doubt on the warning's credibility. Markets are now watching Nvidia, Micron and Broadcom for signs of stress as investors assess whether quant funds are actually initiating large-scale deleveraging, and whether the selling pressure could spread to AI-chip-linked suppliers in Taiwan.