Michael Burry warned that Tesla’s valuation ignores the long-term damage from stock-based compensation, which he says dilutes shareholders by 3.6% annually with no buybacks to offset it. He argued Musk’s $1 trillion pay package guarantees further dilution and criticized companies like Tesla, Palantir, and Amazon for excluding stock comp from adjusted earnings. Burry highlighted these risks as part of his broader view that AI stocks are in a bubble.