WASHINGTON (TNND) — Investor Michael Burry, known for predicting the 2008 housing market crash, is betting $1.1 billion against AI firms Nvidia and Palantir, suggesting potential concerns about an AI bubble.
Burry’s firm, Scion Asset Management, purchased put contracts totaling $912 million in Palantir and $187 million in Nvidia. These contracts allow investors to sell shares at a predetermined price, which can yield profits if stock prices drop.
“Michael Burry has a history of making large bearish bets when he perceives there to be a bubble,” said James Kardatzke, co-founder of Quiver Quantitative. Burry’s recent actions indicate a belief that the AI sector may be facing a similar situation.
After a year away from X, Burry shared a post featuring actor Christian Bale, who portrayed him in The Big Short, stating, “Sometimes, the only winning move is not to play.” He later shared a chart suggesting US tech capital expenditure growth mirrors the 1999-2000 tech bubble.
Nvidia, recently valued at over $5 trillion, and Palantir, which has risen by 400% in the last year, face warnings from Goldman Sachs about the sustainability of AI investments. An MIT analysis indicates many AI investments may yield no returns.
In response to Burry’s short-selling, Palantir CEO Alex Karp criticized the move, calling it “bats— crazy,” emphasizing both companies’ profitability.
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