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Beneath the Surface

A Feud for the Ages

Loading ...Addison Wiggin

August 19, 2025 • 6 minute, 18 second read


AI bubbleelon muskMichael BurrySam Altman

A Feud for the Ages

History loves a feud.

Edison versus Tesla electrified the modern age. Jobs versus Gates shaped the personal computer. Trump versus anyone who doesn’t flatter him — that saga may never end.

But the feud defining our moment is about more than electricity, software, or politics. It’s about reinventing basic principles and the nervous system of the 21st century: artificial intelligence.

At its origin lies a clash between two men who once shared a mission, even a friendship — Sam Altman and Elon Musk.

And the market is watching ringside, wagering fortunes on who will outlast the other.

⚡ Altman v. Musk: The AI Civil War

Altman and Musk co-founded OpenAI in 2015. Musk poured in millions, Altman supplied his Silicon Valley network, and together they promised to build artificial intelligence “for the benefit of humanity.”

But by 2018, Musk walked away, frustrated that his bid to fold the project into Tesla had failed. What began as creative tension has since metastasized into one of the most bitter rivalries in tech.

The insults now flow like an endless Twitter feed. Musk brands his former partner “Scam Altman” and accuses him of transforming OpenAI into a Microsoft puppet. Altman replies that Musk “can’t be a happy person” and manipulates his social media empire to promote only himself.

Their feud sprawls across industries like a wildfire — AI models, brain–computer interfaces, self-driving cars, even rockets.

Altman has backed Merge Labs, a direct competitor to Musk’s Neuralink. He’s partnered with Applied Intuition to challenge Tesla’s self-driving push. And he’s sunk money into Longshot Space, which aims to hurl satellites into orbit with a giant cannon — a shot straight across SpaceX’s bow.

Musk hasn’t just barked back. He sued OpenAI in California, accusing Altman of betraying the nonprofit’s founding vision. The case was tossed aside, only to reemerge in federal court.

Altman countersued, claiming Musk’s campaign was “nonstop harassment.” A jury trial looms. Even now, Musk can’t resist backhanded compliments. “GPT-5 is impressive,” he admitted earlier this year—before calling Altman a liar again on X.

The stakes are enormous. Altman’s OpenAI claims 700 million weekly users. Musk’s X scrambles to maintain 600 million monthly. Tesla struggles with falling sales.

Altman, never shy, hints that his partnerships in self-driving may leapfrog Musk entirely. “We have some new technology,” he said on his brother’s podcast, “that could do self-driving way better than any current approach.”

This is more than rivalry. It is civil war at the heart of a technological boom.

And then, last week, amid the lawsuits and insults, Altman let slip a line that sounded almost like prophecy: “When bubbles happen, smart people get overexcited about a kernel of truth. Are we in overexcited AI territory? Yes. Is AI transformative? Yes.”

It was Edison confessing that the bulb might burn too hot.

🦉 The Quiet Analyst

While Musk and Altman duel in courtrooms and headlines, Michael Burry sits quietly at Scion Capital, eyes buried in spreadsheets. No taunts, no lawsuits. Just numbers.

Two decades ago, he did the same. Alone, he read thousands of mortgage files, tracing the inevitable reset of adjustable-rate loans.

His own investors revolted. They called him “unhinged.” In one 2005 letter, he reminded them: “Sometimes the hardest thing to do is nothing. I am confident in the data.”

Earlier still, in 2001, he had written: “We must remember that we are not playing against the house, but against other investors. And they will overreact.”

That simple conviction — remove emotion, wait for others to overreact — became vindication when the housing market collapsed and Scion netted nearly $1 billion. Hedge fund veteran Joel Greenblatt would later say: “Burry had the guts to stay in the trade. That was the brilliance. That was the art.”

Today, Burry looks at Nvidia — the market’s crown jewel of AI — and sees mania. He has stacked nearly $100 million in long-dated puts against the chipmaker.

At the same time, he’s bought call options on UnitedHealth, a company investors abandoned after lawsuits, scandal, and tragedy. Nvidia embodies hype. UnitedHealth embodies despair. Burry straddles them both.

His method hasn’t changed. He once wrote: “We are unwilling to take part in a market mania simply because it is there.” And again, in another note to investors: “I will be wrong sometimes. But when I am right, the reward will be disproportionate.”

When trades falter, he shrugs. “Being wrong is not the problem,” he has said in interviews. “Staying wrong is.” He trims position size, never conviction.

Burry is not betting against AI. He is betting against the price of AI stocks. Against the story Musk and Altman spin. Against the consensus that risk has vanished.

📉 Mania Meets Arithmetic

Stories drive markets. Musk and Altman are master storytellers. One warns humanity of “woke AI.” The other hails a new dawn of digital intelligence. Investors, eager for a fresh boom, shovel money into their tales.

Arithmetic, though, has no interest in narrative. Arithmetic says the U.S. pays $1.2 trillion a year in interest on its debt. Arithmetic says the government spends $600 billion each month, half of it borrowed. Arithmetic says high-yield spreads — the risk premium for shaky borrowers — are at 30-year lows, as if danger no longer exists.

And beneath the surface of the indexes, arithmetic whispers another truth: fewer and fewer stocks are keeping the averages aloft. Like a Jenga tower, the higher it climbs, the more fragile it becomes.

The story feels good. Arithmetic always wins.

Altman, even while selling the dream, admits it feels like a bubble. Musk, even while mocking him, can’t resist praising the technology. Their feud fuels speculation. Their rivalry is the theater.

But the lesson may belong not to them, but to Burry — the quiet analyst with the spreadsheets. He doesn’t feud. He bets. Patiently. Against hype. For value. His trades are not loud, but they are sharp. He knows stories burn bright. Arithmetic endures.

~Addison

P.S.: Beyond Nvidia and UnitedHealth, Burry’s Scion Capital today carries bullish stakes in Meta, Estee Lauder, Alibaba, and Regeneron — companies bruised by scandal, neglect, or pessimism.

In the Scion portfolio, he also has slivers of gold miners and regional banks, those unfashionable corners of the market Wall Street loves to hate, but where we, too, have found value – especially since gold can trend much further in the years ahead.

The throughline is unmistakable: bet small against the consensus, survive ridicule, wait for arithmetic.

P.P.S. Concerned about market valuations and how to prepare yourself now? You have a few options.

The first and most convenient is one we’ve been suggesting for months – take some profits off the table and raise cash. The Fed hasn’t cut interest rates yet this year – and cash still pays a reasonable yield.

Next, you can look to buy inverse ETFs. When we launched the Grey Swan Trading Fraternity, we provided complimentary research on the ProShares Ultra VIX Short-Term ETF (UVXY).

That fund uses futures so you don’t have to. It targets market volatility, and can see big gains quickly on a market drop, since that tends to coincide with soaring volatility.

But because it uses futures, it’s like holding a hot potato – you want to buy when the valuation is low and take quick profits.

Again, cash is your best friend during market turbulence. And if you want to speculate on a market decline, there are plenty of tools available to profit from a decline without having to learn how to use options.

Your thoughts? Please send them here: addison@greyswanfraternity.com


About Yesterday’s Rally

October 29, 2025 • Addison Wiggin

A high concentration of capital in a few stocks at the top ranks high among the features we detailed in Anatomy of a Stock Market Bubble.  

On days like yesterday, headlines urge investors to buy. However, they also underscore the fragility of this terrifying bull market: just a handful of names can make the difference between a big up day and a big down day.

About Yesterday’s Rally
American Autonomy

October 28, 2025 • John Robb

America’s role in the world isn’t that of the world’s policeman (a temporary post-World War II role foisted upon the U.S. due to the Cold War) or as the destination of immigrants (for most of the 20th century, when we saw the most significant increases in individual incomes and quality of life, the U.S. didn’t accept many immigrants). Instead, the role the U.S. has played throughout its existence is as the world’s leader in the production, adoption, and socioeconomic integration of new technologies. We figured out how to do it successfully first, and the world followed.

American Autonomy
The Liquidity Illusion

October 28, 2025 • Addison Wiggin

AMD’s deal with OpenAI is another echo from 1999. OpenAI agreed to buy six gigawatts’ worth of AMD chips — products that don’t yet exist — in exchange for warrants on 160 million AMD shares, about 10% of the company. AMD stock jumped 24% overnight.

And then there’s Oracle’s $300 billion OpenAI contract — five times OpenAI’s annual revenue. Oracle’s stock soared 43% in a day, making Larry Ellison $100 billion richer.

The Liquidity Illusion
Gold’s Relative Strength

October 28, 2025 • Addison Wiggin

Relative strength, or RSI, provides investors with a quick glance as to how much the market likes or hates a given asset. The correction is a welcome event for hard asset investors.

With the metal back under $4,000, our thesis remains untouched.

In fact, the pullback  – while sharp and severe – makes  gold a less expensive insurance policy against geopolitical shocks and other Grey Swan events.

Gold’s Relative Strength