TLDR: Michael Burry, the investor famed for predicting the 2008 financial crisis, has placed a substantial $1.1 billion bet against prominent artificial intelligence companies, Nvidia and Palantir. This move, disclosed in a recent 13F filing, involves massive ‘put’ options, signaling his belief that these AI giants are overvalued and in ‘bubble territory.’ The announcement has sent shockwaves through the tech sector, leading to significant market declines for the targeted companies and broader concerns about AI stock valuations.
Renowned investor Michael Burry, famously depicted in ‘The Big Short’ for his prescient call on the 2008 housing market collapse, has once again captured Wall Street’s attention with a colossal $1.1 billion bearish wager against key players in the artificial intelligence sector. His firm, Scion Asset Management, revealed in a mandatory 13F filing that it has acquired substantial ‘put’ options targeting AI darlings Nvidia (NASDAQ: NVDA) and Palantir Technologies (NASDAQ: PLTR). This strategic move, representing approximately 80% of Scion’s portfolio as of September 30, 2025, underscores Burry’s conviction that the current AI boom is unsustainable and mirrors past market bubbles.
The disclosure immediately triggered a broad-based tech rout. Palantir’s stock plummeted by as much as 16% on Tuesday, despite the company reporting strong third-quarter earnings and raising its full-year guidance. Nvidia also experienced declines of 2% to 4% during the same trading session. The ripple effect extended to the broader market, with the Nasdaq Composite recording its largest one-day percentage drop in nearly a month, and all ‘Magnificent Seven’ AI-related stocks closing lower. Asian and European markets subsequently registered sharp declines, reflecting global apprehension over tech valuations.
Burry, who communicates his market views under the X handle ‘Cassandra Unchained,’ has been vocal about his concerns regarding market exuberance. He recently posted charts comparing current tech capital expenditure to the dot-com bubble era of 1999-2000 and highlighted a slowdown in cloud computing growth, suggesting a fundamental disconnect between spending and actual returns. His short positions include an estimated $912 million against Palantir and an additional $187 million against Nvidia.
The reaction from those targeted has been swift. Alex Karp, CEO of Palantir, publicly dismissed Burry’s short position as ‘batshit crazy’ on CNBC, asserting confidence in his company’s trajectory. However, critics point to Palantir’s valuation, which trades at an approximate price-to-earnings ratio of 254 (with some reports citing up to 700x earnings), as indicative of speculative pricing.
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This isn’t Burry’s first foray into shorting Nvidia; he held $97.5 million in Nvidia put options in Q1 2025, a position he reportedly lost money on as the stock surged 50%. His decision to double down with an even larger bet suggests a reinforced conviction that the market’s current trajectory for AI stocks is unsustainable. The timing of Burry’s bet aligns with broader warnings from other financial leaders, including Goldman Sachs CEO David Solomon, who cautioned about a potential 10-20% market correction within the next year, and the Bank of England, which expressed concerns that a shift in perceptions about AI progress could lead to a re-evaluation of high future earnings expectations.
