According to Business Insider, Michael Burry’s Scion Asset Management just revealed massive bearish bets against AI darlings Nvidia and Palantir. The firm purchased put options on 1 million Nvidia shares and 5 million Palantir shares, with notional values of $187 million and $912 million respectively. These positions dominated Scion’s entire US stock portfolio, which only contained eight total holdings. Burry returned to X after a two-year hiatus to sound alarms about the AI boom, comparing it to past bubbles through charts showing slowing cloud growth and surging tech capital expenditures. Both stocks fell sharply following the disclosure – Nvidia dropped 4% and Palantir plunged 8% on Tuesday.
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Burry’s bubble warning
Here’s the thing about Michael Burry – when he talks about bubbles, people listen. And he’s not being subtle this time. His social media comeback has been filled with ominous movie references and charts that basically scream “I’ve seen this movie before.” He’s comparing today’s AI infrastructure spending to the dot-com bubble’s telecom bust, where companies built massive networks that ultimately sat unused. The circular dealmaking between Nvidia, OpenAI, Microsoft and others? He sees that as another red flag.
Why this matters now
Look, timing is everything with these contrarian bets. Nvidia just became the first $5 trillion company last week, and Palantir’s valuation has soared to nearly $500 billion – that’s more than Mastercard or Exxon Mobil. But here’s the catch: these valuations depend entirely on continued explosive growth. If Nvidia’s next earnings disappoint? If Palantir’s government contracts slow down? The fall could be brutal. One analyst described the current market as “all tinder soaked in gas” just waiting for a spark.
The high-stakes gamble
So is Burry right or just early? That’s the billion-dollar question. He’s clearly putting his money where his mouth is – these aren’t small speculative positions. They represent massive conviction bets against the very companies driving the AI revolution. But the danger for Burry is getting “run over by momentum and liquidity-fueled markets” if the AI boom continues. Remember, he was early on his subprime bet too. Being right eventually doesn’t mean you survive the ride up.
What comes next
Basically, we’re watching a classic showdown between fundamentals and momentum. Burry’s betting that reality will eventually catch up with hype. The companies themselves? They’re betting they can grow into these astronomical valuations. And retail investors using margin and levered ETFs have piled in, making any potential downturn even more violent. One thing’s for sure – when Michael Burry makes moves this big, it’s worth paying attention. Even if you think he’s wrong.
