Michael Burry Says Elon Musk is a 'Desperately Incentivized Futurist,' Putting 'Cart Before Monkey' With Optimus AI Hype

Big Short's Michael Burry, who predicted the 2008 global financial crash and netted a fortune betting against the housing market, took aim at Elon Musk and his ventures again.

Burry, who recently disclosed buying GameStop (NYSE: GME) shares months after shuttering his hedge fund due to AI bubble fears, said in an X post that while Musk is an American treasure, he is also a 'desperately incentivized futurist,' referring to the merger plans between SpaceX and Tesla (NASDAQ: TSLA).

SpaceX is mulling a merger with Tesla, which Musk hinted at last year while talking about a potential 'convergence' between his companies. Some analysts, including Gene Munster of Deepwater Asset Management, described Musk's plans as a positive move, but Burry isn't convinced.

Musk also made bold claims during Tesla's Q3 earnings call that the Optimus robot and AI could soon reach general intelligence, and shared a chart about AI progress, showing how it improves slowly at first, then accelerates rapidly, eventually surpassing human intelligence levels earlier than expected. General intelligence is when an AI system achieves human-like cognitive abilities and can autonomously learn, understand, and apply knowledge. However, Burry is urging the market to temper its expectations.

Musk Going All In on Optimus

Musk appears to be going all in on Optimus robots as he recently highlighted that Tesla will end the production of its flagship Model S sedan and Model X SUV, which played a crucial role in establishing the EV maker as a leader in the space during its early years. Some of Tesla's EV factories will be repurposed for the mass production of Optimus robots. He plans to launch its 'incredibly capable' Optimus 3 robot in the coming months, which he believes could 'actually move [the] needle on US GDP significantly' in the future.

'Optimus 3 really will be a general-purpose robot that can learn by observing human behavior, so you can, like, demonstrate a task or literally verbally describe a task or show it a task, even show it a video, and it will be able to do that task,' Musk said.

However, Burry noted: 'cart before monkey robot people. No one has invented AI yet.' While the investor said he does not hold a short position against Tesla, his remarks could imply that the current AI is nowhere near general intelligence, and that Musk's claims are premature.

Earlier, Burry had said Tesla is 'ridiculously overvalued,' while focusing on the 'tragic algebra' of stock-based compensation, citing Tesla as a prime example. Burry said that Tesla dilutes its stock by approximately 3.6% annually, yet the company has not implemented share buybacks to offset this dilution.

He also highlighted the EV maker's frequent strategic pivots, noting how the automaker has shifted focus across various sectors. 'As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now it is all-in on robots — until competition shows up,' Burry had remarked.

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