Archive · 5 Nov 2025
Michael Burry Bets $1.1 Billion Against AI Stocks Amid Valuation Concerns
Michael Burry is an investor who became famous for predicting the housing market crash in 2008, much like in the movie 'The Big Short'.
He's known for making big bets that go against what most people think.
After making a lot of money on the housing crash, he also tried betting on things like water scarcity by investing in farmland.
However, his other bets haven't always worked out; he's made some successful calls and some misses, like when he bet against Tesla and Bitcoin, which later went up.
Now, he thinks that stocks related to artificial intelligence, especially Palantir and Nvidia, are like a giant bubble that's about to pop.
He's betting over a billion dollars that their prices will fall.
The CEO of Palantir thinks this is a crazy bet.
Burry is like a prophet who sees danger where others see opportunity, and only time will tell if his prediction this time will be right.
Michael Burry, known for his 2008 housing market bet, has taken a $1.1 billion short position against AI stocks.
His bet primarily targets Palantir Technologies and Nvidia, which constitute nearly 80% of his portfolio.
Burry believes these AI stocks are in a speculative bubble, drawing parallels to past market collapses.
His recent investment record has been mixed, with some successful contrarian calls and some misses.
Palantir's CEO has publicly criticized Burry's bet, while the market's reaction saw initial stock dips for Nvidia and Palantir.
- Who
- Michael Burry, founder of Scion Asset Management and investor known for predicting the 2008 financial crisis.
- What
- Has made a significant bet, shorting $1.1 billion of artificial intelligence stocks, primarily Palantir Technologies and Nvidia, through put options.
- When
- His latest filings disclose this bet, following a period of strong performance in AI stocks.
- Where
- The bets are against publicly traded companies, with a significant portion of his portfolio (~80%) allocated to these short positions.
- Why
- Burry believes these AI stocks are in a speculative bubble, similar to the 2008 housing crisis, and is placing a contrarian wager against their continued rise.
Michael Burry's Perspective
Critics and Affected Companies' Perspective
Valuation of AI Stocks
Michael Burry's Perspective
Believes AI stocks like Palantir and Nvidia are overvalued and represent a bubble, citing high price-to-earnings ratios (Palantir at 700x earnings) and significant stock price increases (Nvidia up 54%, Palantir up 170% this year). He draws parallels to past market collapses.
Critics and Affected Companies' Perspective
Nvidia has reached a $5 trillion market cap and Palantir's CEO, Alex Karp, dismissed those shorting AI stocks as 'bat**** crazy'. The market's continued rise in these stocks suggests Burry's assessment may be incorrect.
Investment Strategy and Track Record
Michael Burry's Perspective
Has a history of making contrarian bets based on his analysis, most famously a short against the housing market in 2008. He believes passive investing has become a bubble and warns against speculative bubbles like Bitcoin. He invokes the myth of Cassandra to suggest he is telling a truth others will not believe.
Critics and Affected Companies' Perspective
Has an uneven record with recent predictions, including missing out on the GameStop meme-stock surge, incorrectly shorting Tesla, and his 'sell' prediction in 2023 being wrong as markets soared. Elon Musk has referred to him as a 'broken clock'.
- Name
- Michael Burry
- Notable Success
- $100M profit from 2008 housing market collapse
- Previous Fund
- Scion Capital
- Current Fund
- Scion Asset Management
- Recent Bet
- $1.1 billion short exposure against AI stocks (Palantir, Nvidia)
- Fund Management
- Approximately $1.4 billion
- Investment Thesis
- Believes AI stocks are in a speculative bubble, similar to past market collapses.