Michael Burry Warns AI-Linked Private Credit Could Become Source of Broader Financial Contagion

Michael Burry warned that AI-linked private credit and insurer balance sheets could become a new systemic risk.

He said private equity firms have used insurers to hold illiquid assets tied to AI infrastructure.

Fast growth in data center and semiconductor financing could spread losses across the financial system if rates stay high or AI funding slows.

Burry argued that insurer exposure and private credit leverage could amplify contagion if conditions worsen.