The Return of a Reluctant Prophet
Seventeen years after he earned global fame for predicting the 2008 housing market collapse, Michael Burry—the investor immortalized in The Big Short—has returned to the headlines. Now 54, the founder of Scion Asset Management is once again betting against what he sees as the next great financial bubble: artificial intelligence stocks.
In a move reminiscent of his legendary contrarian instincts, Burry has placed a $1.1 billion short position against two of AI’s biggest players, Nvidia and Palantir Technologies, signaling his belief that the sector’s astonishing rise is due for a dramatic fall.
The Bet: $1.1 Billion Against the Machines
According to recent SEC filings, Burry’s hedge fund has acquired massive put options—contracts that gain value when stock prices drop—on Nvidia and Palantir. These positions reportedly represent nearly 80% of Scion’s entire portfolio, making this his largest wager since the housing bubble burst.
His targets are not random. Nvidia, now worth around $5 trillion, has become the poster child of the AI revolution, while Palantir’s shares have surged 170% in 2025 alone. Yet Burry believes these numbers mask dangerously inflated valuations. Nvidia trades at roughly 57 times earnings, and Palantir at an extraordinary 439 times, figures he argues are unsustainable in the long term.
To Burry, the AI frenzy mirrors the speculative mania of past financial bubbles—an intoxicating mix of innovation, hype, and herd psychology.
Echoes of 2008: Lessons from “The Big Short”
Burry’s skepticism carries historical weight. A former medical doctor turned data-driven investor, he famously dissected the U.S. housing market before 2008, discovering weaknesses hidden in mortgage-backed securities that even Wall Street missed. His conviction trade against those assets earned his fund hundreds of millions of dollars and cemented his status as a symbol of rational dissent in irrational times.
Now, Burry sees similar warning signs in the AI sector—overexuberance, excessive valuations, and a lack of tangible returns. The parallels, he suggests, are too familiar to ignore. “Markets learn nothing from history,” he once tweeted, and his latest short appears to embody that sentiment.
Market Ripples and Investor Reactions
News of Burry’s short position sent jitters through global markets, triggering brief sell-offs in tech-heavy indices. AI-driven stocks wobbled, and even Japan’s Nikkei dipped as traders weighed the possibility of a sector-wide correction.
Still, the timing of his trade is far from certain. Analysts warn that momentum-driven markets can stay irrational longer than short-sellers can stay solvent. With AI adoption continuing to surge and corporate earnings still climbing, Burry’s puts could remain underwater for months—or even years—before any downturn materializes.
His critics call him “too early.” His admirers call him “right before everyone else.”
Visionary or Skeptic Ahead of His Time?
Michael Burry’s $1.1 billion bet against AI stocks is not just a trade—it’s a statement. It challenges the euphoria surrounding artificial intelligence, reminding investors that innovation does not immunize markets from excess.
Whether Burry emerges again as the seer of another market collapse or simply the bear who growled too soon, his move stands as a stark warning: when valuations defy fundamentals, even the brightest technological revolutions can dim.
For now, the man who once shorted Wall Street’s confidence is shorting its newest obsession—the belief that AI can only rise.
(With agency inputs)
