Michael Burry, the investor who famously predicted the 2008 housing collapse, has made a new and striking move: a $1 billion bet against Nvidia and Palantir, two of the most emblematic companies of the current artificial intelligence boom.
According to recent disclosures from Scion Asset Management, Burry’s fund has acquired substantial put options –financial instruments that rise in value when share prices fall– on both stocks. The position represents a clear challenge to one of the most dominant market narratives of the past two years: the seemingly unstoppable ascent of AI-driven companies.
Nvidia, whose chips power nearly every major AI system; and Palantir, whose data analytics and defense contracts have made it central to real-world AI deployment, have each experienced extraordinary growth. Their valuations have soared to historic highs, making them symbols of investor confidence in the AI revolution.
Despite their glowing rise, Burry’s position suggests a familiar thesis: that markets may once again be mistaking innovation for invincibility. This revelation, which was revealed through mandatory SEC filings rather than public commentary, quickly drew attention across financial circles. For many, it evokes his earlier contrarian stance before the 2008 crisis.
Revolution or collapse
In a brief but pointed post on X (formerly Twitter), Burry wrote:
“Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”
He offered no further explanation, yet the post appeared just days before Scion Asset Management’s filings revealed nearly $1 billion in put options against Nvidia and Palantir. The timing, coupled with his record of contrarian calls, has led many analysts to interpret the message as a warning about excessive optimism in the AI sector.
That interpretation does not come from Burry himself but from market context and public data. Nvidia’s valuation recently exceeded $2 trillion, while Palantir’s market cap has more than doubled within a year as investors rush to gain exposure to artificial intelligence. As reported by Business Insider and The Washington Post, this surge has drawn comparisons to past speculative peaks, moments when narrative momentum outpaced underlying earnings growth.
A disciplined contrarian
Burry has built his reputation on identifying disconnects between story and substance. In 2008, that disconnect centered on the mortgage-backed securities market; in 2025, it appears to lie within the exuberance surrounding artificial intelligence. For Burry, the pace and scale of its growth has outstripped even the most optimistic fundamentals. Nvidia’s revenue more than tripled within two years, while Palantir’s stock multiplied as investors began treating it less like a software firm and more like a symbol of the AI revolution. In Burry’s view, that acceleration is unsustainable, because markets rarely maintain exponential trajectories without correction.
In his framework, this is not a rejection of AI itself but of the market psychology that assumes linear progress in an inherently cyclical system. The same overextension that fueled the dot-com bubble, crypto mania, and pandemic-era tech rallies is now visible in AI: a convergence of real innovation and speculative excess.
The anatomy of an IA’s boom
The rise of artificial intelligence has coincided with one of the strongest equity market expansions in recent years. Since 2023, companies linked to AI infrastructure, data analytics, and cloud computing have led global market gains.
The financial effects have been highly concentrated. The seven largest technology firms now account for over 30% of the S&P 500’s market value, a level of concentration not seen since the early 2000s. During the same period, the AI sector’s average price-to-earnings ratio nearly doubled that of the broader index, reflecting investors’ expectations of sustained growth.
Venture capital has mirrored this trend. Funding for AI and automation reached $67 billion globally in 2024, reflecting investors’ continued appetite for high-growth technology sectors. Meanwhile, according to IDC’s Worldwide Artificial Intelligence Spending Guide, global AI investment (including software, hardware, and services) is projected to reach $500 billion by 2027, growing at a compound annual rate of nearly 30%. Despite higher interest rates and tighter monetary policy, investment momentum has remained strong, supported by institutional inflows and government initiatives in strategic technologies.
Historically, such phases of technological concentration and capital acceleration have marked turning points in broader market cycles, not as predictions of collapse, but as indicators of how innovation reshapes financial behavior. The current AI boom follows that pattern: rapid adoption, elevated expectations, and increasing dependence on a few dominant players.
Whether this cycle will stabilize into long-term structural growth or adjust through valuation normalization remains uncertain. What is clear is that artificial intelligence now functions as both a technological and financial force, defining how global markets perceive progress itself.
Frequently Asked Questions
Who is Michael Burry and why do his predictions matter?
Michael Burry is the investor who famously foresaw the 2008 housing collapse. His market warnings often gain attention because they challenge mainstream optimism.
What connects AI investments with past financial bubbles?
Both share a pattern of rapid capital inflows, inflated valuations and a belief that new technology will permanently rewrite market rules until fundamentals catch up.
Why are Nvidia and Palantir important in the AI market?
Nvidia designs the chips that power most artificial intelligence systems worldwide, while Palantir provides data analytics and AI-driven software for governments and large corporations. Together, they represent two key pillars of the AI economy, hardware and data.
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