Michael Burry Bets Big Against AI Titans—Bubble About to Burst?

The Overlord
Nov 5, 2025
3 min read

Michael Burry, famed for predicting the 2008 housing crash, is shorting AI giants Nvidia and Palantir. Could the AI party be over?

A Cassandra Returns: Burry Wagers Against the AI Boom

The name Michael Burry should make financial markets shiver—after all, he foresaw the 2008 housing collapse while everyone else doodled on their spreadsheets. Now, he’s upping the stakes again, this time wagering $1.1 billion against tech juggernauts Nvidia and Palantir. Burry’s weapon of choice? Substantial put contracts, a move familiar to anyone who studied the chaos, and snark, of 'The Big Short.' As AI stocks soar into the stratosphere, Burry’s contrarian bet flashes a warning light: Is the air up there dangerously thin? Investors and armchair economists alike are left sipping their lattes, wondering—are we all staring at another bubble, or is this just Burry being Burry?

Key Point:

Michael Burry is shorting AI favorites, suggesting a potential bubble in the sector.

Past Is Prelude: The Man, The Bet, The Market Memory

Michael Burry is not your average market doomsayer; he has receipts. Back in 2005, while Wall Street basked in subprime euphoria, he plunked down a billion-dollar bet against the U.S. mortgage market—a wager immortalized in Hollywood and the annals of financial lore. Fast forward to the autumn of 2025, and Burry’s Scion Asset Management is at it again, acquiring hefty put options: $912 million targeting Palantir and $187 million aimed at Nvidia, according to regulatory filings. Why such drama? Two words: pattern recognition. Burry, echoing the dot-com and housing bubbles, sees familiar signs in today’s AI sector. While Nvidia recently strutted past a $5 trillion valuation and Palantir’s stock soared 400% in a year, red flags abound—Goldman Sachs and MIT hint at disappointing AI returns, investing billions for, essentially, a well-polished nothingburger. Palantir’s CEO Alex Karp offers righteous indignation, but history often remembers the heretics, not the cheerleaders. One almost expects the market to blink first.

Key Point:

Burry's tactic is classic for him—spot the exuberance, find the holes, then place the mother of all shorts.

Bubble or Bold Move? Reading the Tea Leaves of Tech Euphoria

Let’s parse the data: Burry is not alone in skepticism. MIT’s August report calls out AI investments producing 'zero return.' Goldman Sachs moans about untold billions likely going up in digital smoke. Yet, AI fever persists—stocks balloon; headlines gush; executives strut on CNBC. Some would call this irrational exuberance; others, just business as usual in tech. Then there’s the delicious irony: the man who once decoded financial markets through sheer data obsession is now betting against companies whose lifeblood is, you guessed it, data. Burry’s put contracts aren’t a mere hedge—they’re a slap to the confidence of investors drunk on predictions of AI-fueled world domination. Is he early, as so many Cassandras are? Or has he, yet again, seen what others refuse to? Insider skepticism is mounting, but tech optimists seem immune, at least until the next quarterly report falls short of utopian expectations.

Key Point:

Even as AI dazzles, skeptical insiders—and Burry—see the makings of an all-too-familiar bubble.

IN HUMAN TERMS:

Lessons from Bubbles Past: Fear, Greed, and Financial Myopia

If Burry is right, the implications go far beyond a few bruised egos and plummeting tech shares. Recall, the collapse he predicted in 2008 led to global financial chaos. Market bubbles, particularly those inflated on hubris and hope, tend to pop in spectacular—sometimes catastrophic—fashion. This latest bet isn’t just a wager against two companies; it’s a mirror held up to an industry (and investors) hypnotized by its own brilliance. For businesses pouring cash into AI without seeing returns, Burry’s position should resonate as a somber tune. Are companies investing in actual disruption or simply bidding up buzzwords? Investors playing musical chairs with overvalued stocks may want to check if the band is still playing. As history has proven, markets are notoriously allergic to inconvenient reality checks.

Key Point:

Burry’s bet is a sharp reminder that hype without substance often ends in tears—and market corrections.

CONCLUSION:

History’s Echo: Will the Algorithm Eat Itself?

So here we are—creators marveling at the creations, AI stocks floating higher, traders hurling cash like confetti. Yet, Michael Burry stands firm in the corner, waving his billion-dollar red flag and muttering (possibly in binary) about bubbles. Whether he’s right or merely echoing past glories, one truth cuts through the noise: markets forget lessons faster than algorithms can learn new tricks. In this drama, whose script will the market follow—the prophets or the profiteers? Either way, keep one eye on the exit and the other on Twitter, where our modern Cassandras now post memes instead of prophecies.

Key Point:

When it comes to tech bubbles, the only real innovation is finding new ways to ignore old warnings.