Michael Burry Calls an AI Bubble, Bitcoin Crashes on Weak Sentiment, Nvidia’s $2B Synopsys Bet Raises Eyebrows & Starbucks Faces a $35M Worker Settlement

2nd December, 2025

Michael Burry is back with a new “Big Short,” warning that generative AI is deep in bubble territory as Scion’s analysis shows trillion-dollar infrastructure spend far outpacing real economic value. Bitcoin sinks as much as 8% as crypto sentiment sours, ETFs bleed billions, and fears of a Japan-driven unwind hit Coinbase, Strategy, and Robinhood. Nvidia tightens its grip on the AI ecosystem with a bold $2 billion stake in Synopsys, expanding its influence across chip design and high-tech engineering. And in New York, Starbucks will pay $35 million to workers after a sweeping scheduling-rights settlement as baristas escalate nationwide strikes. All this and more in today’s Read It And Eat!

Major Headlines

• Michael Burry's next 'Big Short': An inside look at his analysis showing AI is a bubble

  
  

Michael Burry  famed for calling the 2008 housing crash  is now warning that artificial intelligence may be the next major market bubble. Although he recently deregistered Scion Asset Management, Burry remains active and is building a bearish view rooted in research from Phil Clifton, Scion’s former associate portfolio manager. Clifton argues that while generative AI adoption appears widespread, the economic value created so far is too small to justify the massive global investment into AI infrastructure. 

Clifton’s analysis highlights a sharp imbalance: OpenAI may surpass $20 billion in annualized revenue, yet hyperscalers are spending nearly $400 billion each year on infrastructure, with projections of $3 trillion in spending over five years. Scion compares this dynamic to the early-2000s telecom bubble, when excessive fiber-optic buildouts led to severe overcapacity and a collapse in pricing. Clifton warns that cloud giants are similarly racing to expand AI data centers based on assumptions of future demand that may not materialize quickly. Early cracks are already appearing, such as Microsoft canceling major data center projects and Alibaba’s leadership cautioning that an AI infrastructure bubble is forming.

Nvidia sits at the center of this potential mispricing, benefiting enormously from unprecedented GPU purchases. However, Scion argues that tech companies may struggle to earn real returns on those investments, especially as Nvidia’s annual product cycles quickly render older chips less competitive long before their six-year depreciation schedules end. Nvidia insists that its chips remain productive due to CUDA software efficiencies, but Burry and other critics note a contradiction: Nvidia simultaneously claims older chips remain valuable while insisting newer models offer vastly superior performance. Through his new Substack, Burry is laying out why this tension  paired with unsustainable infrastructure spending  could signal that AI’s current boom has all the ingredients of a bubble in the making. CNBC

• Bitcoin slides on 'weak' sentiment, Strategy, Coinbase among crypto stocks hit

Bitcoin (BTC-USD) tumbled as much as 8% on Monday alongside crypto-related stocks, casting doubt on a year-end rally despite growing prospects of a Federal Reserve interest rate cut. The world's largest cryptocurrency fell from around $91,000 on Friday to as low as $84,000 on Monday over concerns that Japan could raise interest rates, sparking fears that investors who borrowed Japanese yen to buy assets like US stocks and bitcoin might then rush to reverse those trades. The last time such an unwind happened, in August 2024, bitcoin plunged from over $66,000 to around $54,000 in just a few days, an 18% drop, Nic Puckrin, investment analyst and co-founder of the Coin Bureau, noted.

"Now that history is repeating itself, it’s wise to prepare for more volatility," Puckrin said, highlighting how the sharp drop last year was followed by a recovery and new highs. "Beyond Japan, the macro backdrop remains favorable for risk assets," he said, noting the growing probability that the Federal Reserve will lower rates in December. "If you zoom out, there are still reasons to be optimistic amid all the doom and gloom." Still, bitcoin exchange-traded funds (ETFs) posted their second-worst month in November, with $3.5 billion in outflows. The token is now down more than 30% from its October all-time high above $126,000. "While conditions can shift quickly, a sustained rally still appears unlikely in the near term, especially before year-end. But 2026 may present a very different setup," said a 10X Research client note on Monday.

Bernstein analysts noted they are "still looking for clear signs for bitcoin to bottom out." The token's "price action suggests weak market sentiment, which has impacted digital asset equities," analyst Gautam Chhugani said in a note on Monday morning. Over the past 30 days, trading platform Coinbase (COIN) is down roughly 20%, stablecoin issuer Circle (CRCL) is down 38%, and Robinhood (HOOD) is down 16%. Bitcoin juggernaut Strategy (MSTR) has declined roughly 40% over the past month. Concerns that lower token prices could prompt Strategy to sell some of its bitcoin to cover dividend and interest payments on debt have weighed on the stock. On Monday, the company announced that it had established a US dollar reserve of $1.44 billion through an equity offering to support the "payment of dividends on its preferred stock and interest on its outstanding indebtedness."

Prior to Strategy's announcement, Bernstein and Benchmark strategists called the concerns over Strategy's future overstated and unrealistic. "In simple terms, the company would be unable to fully cover its ~$8.2bn of convertible debt outstanding if bitcoin’s price were to fall below $12,700 and stay there," wrote Benchmark's Mark Palmer on Monday morning. "That would require a decline of ~86% from current levels. While drawdowns of 80%+ have occurred multiple times during bitcoin’s 17-year history, we believe multiple macro shocks would have to happen simultaneously to drive such a reversal at this point, especially as speculative retail investors have been replaced by institutional entities as the marginal buyers of the cryptocurrency," he added. Strategy stock fell to a 52-week low on Monday as the largest public holder of bitcoin said that yearly net income could range from a loss of $5.5 billion to a profit of $6.3 billion. Yahoo.Finance

• Nvidia takes $2 billion stake in Synopsys as AI deal spree accelerates

Nvidia (NVDA.O), has invested $2 billion in chip design software maker Synopsys (SNPS.O), as part of an expanded multi-year tie-up to jointly develop new tools for designing products across industries using its AI technology. The deal, unveiled by the companies on Monday, comes as Nvidia has carried out a range of investments, such as those in OpenAI and Anthropic, to try to cement its dominance in the artificial intelligence market.

The Synopsys deal is about shifting the work of several high-tech industries that are just starting to adopt AI away from central processing units used in the past and toward the graphics processing unit chips sold by Nvidia. Synopsys software is widely used in designing everything from computer chips to jet engines. Engineers use its tools to simulate those designs virtually in computers before committing to expensive prototype manufacturing. Those simulations can take weeks, but could be sped up to a few hours using Nvidia's chips, the CEOs of the two companies said during a press conference. "The order of magnitude speed-up is going to unlock opportunities that have never been possible before," Nvidia CEO Jensen Huang said in announcing the deal.

Synopsys and Nvidia are customers of one another. Nvidia's flurry of investments has raised concerns that it is paying customers to buy its chips. Synopsys CEO Sassine Ghazi said the Nvidia cash will give Synopsys "optionality" as it adapts its software for Nvidia chips. "There is no intention or commitment to use that $2 billion to purchase Nvidia GPUs," Ghazi said during the press conference. "This is something that we do on a normal course of business." Both CEOs said the deal is non-exclusive, and Ghazi said Synopsys is open to working with other chipmakers. "If an AMD or an Intel or whichever customer wanting to capture a similar opportunity (approaches Synopsys), it's not exclusive. We're willing and happy to work with them," Ghazi said.

Synopsys shares were up nearly 5%, while Nvidia was up 1.4%. The world's most valuable company has invested billions of dollars this year in companies linked to the booming AI industry, ranging from deals allowing as much as a $100 billion investment in ChatGPT parent OpenAI to a $5 billion stake in Intel (INTC.O). Nvidia bought Synopsys's common stock at $414.79 per share, the companies said on Monday, representing a discount of about 0.8% to the stock's last closing price on Friday. Synopsys also counts AMD as a customer, while Nvidia works with the electronic design automation firm's rival Cadence Design (CDNS.O)   Reuters

• Starbucks to pay $35M to NYC workers in settlement as ongoing strike draws pols to picket line

  
  

Starbucks will pay about $35 million to more than 15,000 New York City workers to settle claims it denied them stable schedules and arbitrarily cut their hours, city officials announced Monday, hours before Mayor-elect Zohran Mamdani and U.S. Sen. Bernie Sanders visited striking baristas on a picket line. The development came amid a continuing strike by Starbucks’ union that began last month at dozens of locations around the country. The workers want better hours and increased staffing, and they are angry that Starbucks hasn’t agreed on a contract nearly four years after workers voted to unionize at a Buffalo store. Union votes at other locations followed, and about 550 of Starbucks’ 10,000 company-owned stores are now unionized. The coffee giant also has around 7,000 licensed locations at airports, grocery stores and other locales. 

Workers and the company dispute the extent and impact of the strike, but Mamdani, Sanders and some state and city officials sought to amplify the baristas’ message by mingling with scores of strikers and supporters outside a Starbucks shop in Brooklyn.  “These are not demands of greed, these are demands of decency,” Mamdani, a democratic socialist who ran on pledges to aid working-class people, told the crowd. Some workers carried giant mock-ups of Starbucks takeout cups, bearing the union’s logo instead of the coffee chain’s insignia.  Four years after the first shop’s union vote, “Starbucks has refused to sit down and negotiate a fair contract,” said Sanders, a Vermont independent who supported Mamdani’s campaign.Striking baristas described a harried workplace with chronic short-staffing, online orders so complex that the ticket is sometimes longer than the cup, and last-minute calls to come in. 

“It is the company’s issue to give us the labor amount to schedule partners fairly, and they are not scheduling us fairly, no matter how much money we are making them,” said Gabriel Pierre, 26, a shift supervisor at a store in suburban Bellmore. Starbucks has been trying to bounce back from a period of lagging sales as inflation-conscious U.S. customers questioned whether its coffee concoctions were worth the money. The Seattle-based company recently reported the first increase in nearly two years in same-store sales, a term for sales at locations open at least a year, but restructuring costs, store redesigns and other changes took a bite out of profits in its July-September quarter. Under the agreement announced Monday with New York City’s Department of Consumer and Worker Protection, Starbucks will pay $3.4 million in civil penalties, in addition to the $35 million it is paying workers. The company also agreed to comply with the city’s Fair Workweek law going forward.

The company said it’s committed to operating responsibly and complying with all applicable local laws and regulations everywhere it does business, but Starbucks also noted the complexities of the city’s law.  “This is notoriously challenging to manage,” spokesperson Jaci Anderson said.  Most of the affected employees who held hourly positions will receive $50 for each week worked from July 2021 through July 2024, the department said. Workers who experienced a violation after that may be eligible for compensation by filing a complaint with the department. The settlement also guarantees that employees laid off during recent store closings in the city will get an opportunity for reinstatement at other Starbucks locations.  Economic Times 

Minor Headlines 

• Zootopia 2 roars to record-breaking global box office opening Yahoo News

  
  

• China's DeepSeek debuts two new AI models challenging Google's Gemini and OpenAI's ChatGPT  Yahoo.Finance

  
  

• Artificial tendons give muscle-powered robots a boost MIT News

  
  

• Apple’s artificial intelligence chief is stepping down as the AI race rages Yahoo.Finance

  
  

• 'I was crying to sell Nvidia shares,' says SoftBank founder  Yahoo.Finance

  
  

• ‘Rage bait’ named Oxford’s word of the year Morningbrew

  
  

• India GDP grew 8.2% YoY in Q3 Reuters

  
  

• Point72 founder Steve Cohen won approval to operate a casino in NYC Financial Times