As artificial intelligence fever grips global markets, a warning bell has been sounded by none other than Michael Burry, the legendary investor who predicted the 2008 housing collapse. Burry has now placed a $1.5 billion bet against AI giants NVIDIA and Palantir, raising the alarm that the technology sector may be on the brink of another historic bubble.

While Wall Street braces for potential fallout, few in Australia are acknowledging what’s at stake for local investors, especially those with money in superannuation.

Australia’s Super Is Deep in U.S. Tech

Australia’s $4.3 trillion superannuation system is heavily exposed to U.S. equities, with around 20% — roughly $800 billion — invested in American companies, many of which are in the same AI-focused firms now facing Burry’s scrutiny.

That exposure is set to deepen. A new bilateral investment agreement announced by Prime Minister Anthony Albanese last week could channel over $1 trillion of Australian super funds into U.S. infrastructure and tech investments. Market commentators have labelled it a “partnership for prosperity”, but critics warn it could be a one-way ticket for Australian retirement savings into America’s next speculative boom.

The Risk No One Talks About

As Australians grapple with rising rents, cost-of-living pressures, and stagnant wages, their super funds are deploying billions into an overheated U.S. market. Recent developments suggest the tech tide may already be turning.

The U.S. government’s ban on AI chip exports to China has disrupted a major revenue stream for NVIDIA, prompting China to retaliate by blocking foreign chips in state-backed projects and backing domestic competitors like Huawei. Even NVIDIA CEO Jensen Huang has conceded it would be “foolish to underestimate” China’s tech capabilities.

“This is no longer just a trade dispute; it’s an escalating tech war,” said Filip Tortevski, Senior Analyst at Wealth Within. “When global tech stocks stumble, so do the Australian super funds holding them.”

When Tech Falls, Super Follows

Flagship investment options like AustralianSuper’s International Shares fund, a favourite among local investors, list Microsoft, Apple, Amazon, Meta, and NVIDIA among their largest holdings. Such concentrated exposure leaves millions vulnerable if the AI trade unravels.

“When bubbles burst, they don’t drift down gently; they snap,” Tortevski added. “Australians could see their super balances fall sharply, erasing years of gains in months.”

A Wake-Up Call for Investors

While Michael Burry shorts U.S. tech titans, the real “big short” may be the blind faith Australians place in a system investing their futures offshore. If the AI bubble bursts, it won’t just be a story about Wall Street’s missteps; it could become one about Australian savers left holding the bag.

Filip Tortevski is the Senior Analyst and Finance Commentator at Wealth Within. He is also a sought-after speaker at trading workshops and events, imparting insights and strategies to aspiring traders. With over 15 years of experience in share trading and seven years dedicated to full-time trading, Fil's expertise is unparalleled. His adaptable trading style reflects his agility in the ever-evolving market landscape.

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