Michael Burry, the "Big Short" investor, announced last week that he placed new bets against Nvidia and Tesla, as well as the iShares Semiconductor ETF (SOXX). In a July 9 post on his Substack, Burry outlined a contradiction he sees in the AI trade, writing, "The hyperscalers are promising permanent demand growth and temporary spending over 3-4 years all in the same breath. Nvidia needs the permanent demand growth. Hyperscalers need the buildout to be largely over in 3-4 years." Burry stated that Nvidia needs an endless cycle of demand for its AI chips, but that a divergence is coming between its current and future revenue. He said, "Nvidia's revenue growth is mostly real but the resolution of the bottleneck, any which way or when it happens, reduces the recurrence rate of Nvidia's revenue, which will also take down the scarcity premium and hence margin for both new and old chips." Burry noted that companies purchasing Nvidia's chips, such as Meta, Amazon, and Microsoft, are seeing free cash flow crumble. "The hyperscalers are seeing free cash flow fall toward zero already," he said. Burry dismissed the idea of a "third door" that benefits both hardware makers and capex spenders, concluding, "There is no third door."