According to Fortune, Michael Burry’s Scion Asset Management disclosed over $1 billion in put options against AI giants Nvidia and Palantir in regulatory filings for the quarter ending September 30. Burry, famous for predicting the 2008 housing collapse, had been warning about an AI bubble through cryptic social media posts showing charts comparing current tech spending to the dot-com era. The bets come as Nvidia became the world’s first $5 trillion company last week while Palantir shares are up 157% year-to-date. Immediately following these disclosures, tech stocks led a market downturn with Palantir dropping 16% after earnings and Nvidia falling over 2%. Goldman Sachs and Morgan Stanley CEOs also warned of potential 10-20% market corrections in the next 12-24 months.
Burry Puts His Money Where His Mouth Is
This isn’t just talk – Burry’s actually backing up his bubble warnings with real money. And we’re talking serious cash here. The SEC filings show his fund bought put options that would profit if Nvidia and Palantir shares decline. What’s interesting is that he’d already taken a position against Nvidia back in Q1 and liquidated nearly his entire equity portfolio. Now he’s doubling down.
His recent social media activity gives us clues about his thinking. He posted that “sometimes, the only winning move is not to play” and shared charts showing how concentrated the AI boom is around just two companies: Nvidia and OpenAI. Basically, he’s saying the entire AI revolution is standing on pretty narrow shoulders.
Palantir CEO Fires Back
Alex Karp didn’t take this lying down. The Palantir CEO went on CNBC and called Burry’s move “batsh-t crazy.” His argument? “The two companies he’s shorting are the ones making all the money.” And he’s got a point – Nvidia’s chips are powering the AI revolution, and Palantir’s AI platforms are seeing massive adoption.
But here’s the thing: making money today doesn’t mean your valuation makes sense tomorrow. Palantir beat revenue expectations but still dropped 16% because they couldn’t provide clear visibility into 2026. That’s exactly the kind of uncertainty that makes bubble-watchers nervous.
Bigger Market Jitters
This isn’t happening in isolation. The fact that Goldman Sachs and Morgan Stanley CEOs are both warning about 10-20% market corrections tells you something’s brewing. We’re seeing tech stocks lead the decline across the board – Oracle, Microsoft, Apple all trading down.
Burry’s latest chart posts comparing current capital expenditure growth to the dot-com era should give anyone pause. Remember how that ended? The parallels are… concerning.
So Is This The Big Short 2.0?
Look, Burry has been right before when everyone thought he was crazy. But timing bubbles is notoriously difficult. Nvidia and Palantir aren’t worthless companies – far from it. They’re actually delivering real products and real revenue.
The question isn’t whether AI is valuable – it clearly is. The question is whether current valuations reflect reality or fantasy. When companies that are actually performing well still can’t satisfy investor expectations, that’s usually a sign that expectations have gotten disconnected from reality.
One thing’s for sure: when someone who correctly called the last massive financial collapse starts betting against today’s hottest stocks, it’s worth paying attention. Even if you think he’s wrong.
