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Comparison of Market Risks
Comparison of VC funding and High-Yield debt concentration between the Dot-Com era and the current AI boom.
Primary Sources
Michael Burry Says Today's AI Debt Bubble Mirrors The Dot-Com Era
The ‘Cleaner’ Market IllusionResponding to recent macroeconomic data on X, Burry challenged the prevailing narrative surrounding the quality of AI-related debt.Referencing data compiled by Apollo Global Management’s Chief Economist Torsten Slok, Burry pointed out that a staggering 38% of current high-yield bond issuance is now linked to AI. A high-yield bond, also known as a junk bond, is a corporate bond issued by companies with lower credit ratings.He drew a direct, sobering comparison to the tech-media-telecom (TMT) bubble, noting that TMT bonds constituted 40% to 50% of high-yield issuance in the year 2000.“High yield debt at 38% today vs 40%-50% back then belies the idea that today’s AI debt issuance is cleaner, backed by more profitable companies today,” Burry stated.Echoes Of The 1999 TMT BubbleBurry further emphasized the severe historical risks by pointing to the devastating aftermath of the early 2000s market crash. He warned investors that over $100 billion of investment-grade debt issued during the 1999-2000 frenzy eventually became “junk by 2002.”The frightening parallels extend deeply into the venture capital sector as well; while broader TMT funding hit 80% of all venture capital funding in 1999, an even higher 87% of VC funding today is directed strictly at AI.Penetrating ‘Every Corner’ Of FinanceSlok noted that what initially began as an “equity market phenomenon has become a capital markets-wide transformation.”Beyond venture capital and high-yield bonds, year-to-date net issuance data shows AI now also accounts for a massive 49% of investment-grade bond issuance, increasingly pushing out non-AI investments across multiple channels.Here’s a list of a few AI-linked ETFs for investors to consider.Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.Photo courtesy: ShutterstockMarket News and Data brought to you by Benzinga APIs© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.To add Benzinga News as your preferred source on Google, click here.
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