With Michael Burry 1 & Leopold Aschenbrenner 2 placing heavy short trades on AI, questions about GPU depreciation, & the Saaspocalypse, how negative is the financial market on AI?
We can look at the percentage of shares sold short, a bet the stock will decline.
Across all software, semiconductor, neocloud, data center, & hyperscalers, the median short interest (short shares / total shares) has increased by about 24% in the last quarter.
One segment stands out for gloomy skies in the cloud: the GPU data center businesses, whose shorted shares have grown 60% in the last year 3. AI cloud and neocloud companies have the highest current median short interest at 16.8% of float.
The negative sentiment for SaaS & Dev Tools is a more abrupt & recent phenomenon. Developer tools and infrastructure software follow at 9.5%. Enterprise SaaS and AI apps sit at 8.9%.
Hyperscalers are at the other end of the spectrum. Their median short interest is 1.1%. NVIDIA, the defining AI infrastructure stock, is also lightly shorted: 1.2%.
Semiconductor stocks saw a decrease in short-selling. With memory makers like Micron up 742% this year 4, & many ecosystem CEOs pointing to memory & storage as the limiting factor, the newest trillion-dollar companies are all memory.
The stocks with the most actively bearish betters? Most of these are small or mid-cap companies. The updated chart below adds market capitalization to each company label. The largest AI winners are mostly absent.
SoundHound AI is 36.3% short. C3.ai is 32.2%. BigBear.ai is 29.4%. Applied Digital is 28.0%. UiPath is 22.0%. TeraWulf is 21.3%.
This is the market’s current AI skepticism map.
The skepticism is concentrated in companies whose AI exposure still depends on future capital access, future demand, or future operating leverage.
That distinction matters. If short interest were rising uniformly across AI semiconductors, hyperscalers, and software, the message would be broad fatigue with the AI trade. Instead, the data suggest a more specific view: memory has become critical & in short supply; software & devtools businesses need to prove their worth post-AI; & businesses reselling GPUs have more than their fair share of doubters about current prices versus long-term value.