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. The ‘Big Short’ investor, famous for predicting the 2008 housing collapse, has been posting cryptic warnings on X about market bubbles, including graphics comparing current AI spending to the dot-com era. Palantir CEO Alex Karp immediately fired back, calling the short positions “batsh-t crazy” during a CNBC interview. The news comes as tech stocks led a market downturn, with Palantir dropping 16% despite beating revenue expectations and Nvidia falling 2% after recently becoming the world’s first $5 trillion company. Both Goldman Sachs and Morgan Stanley CEOs are predicting 10-20% market corrections in the next 12-24 months.
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Putting Money Where His Mouth Is
This isn’t just theoretical for Burry. He’s actually placing billion-dollar bets that these AI darlings are overvalued. And he’s been telegraphing this move for months through those cryptic social media posts about bubbles and how “sometimes, the only winning move is not to play.” What’s particularly interesting is that Scion had already disclosed a put on Nvidia back in the first quarter, then liquidated nearly its entire equity portfolio. Now they’re doubling down.
The timing here is everything. Nvidia just hit that insane $5 trillion valuation last week, and Palantir‘s stock is up 157% year-to-date. Burry’s basically saying the emperor has no clothes while everyone else is still cheering. And he’s not just betting against random AI companies – he’s targeting the two that are actually making real money from this boom. Which makes Karp’s reaction both hilarious and telling.
The CEO Pushback
Palantir’s Alex Karp didn’t hold back in his response. “The two companies he’s shorting are the ones making all the money, which is super weird,” he told CNBC. “The idea that chips and ontology is what you want to short is batsh-t crazy.” Karp has a point – these aren’t speculative startups burning cash. They’re the infrastructure players actually profiting from the AI gold rush.
But here’s the thing: Burry might be looking beyond current profitability to the sustainability of these valuations. When you see those charts comparing AI capex to the dot-com era, it’s hard not to get flashbacks. The market’s treating AI like it’s 1999 all over again, and Burry’s essentially saying he’s seen this movie before and knows how it ends.
Bigger Market Jitters
This isn’t happening in isolation. The fact that both Goldman Sachs and Morgan Stanley CEOs are warning about 10-20% market corrections suggests institutional players are getting nervous too. Tech stocks led Tuesday’s sell-off, with Palantir’s 16% drop coming despite beating revenue expectations. Deutsche Bank noted that markets were “disappointed at the lack of company visibility for the whole of 2026.”
So what’s really going on here? Basically, everyone’s realizing that AI can’t grow at this pace forever. The regulatory filings show Burry isn’t just betting against AI – he’s also buying calls on more traditional companies like Pfizer and Halliburton. He’s rotating out of high-flying tech and into what he presumably sees as more stable value plays.
Burry’s Track Record
Let’s be real – when Michael Burry makes a big bet, people pay attention. The guy literally became famous for being right when everyone else was wrong. But timing is everything with these contrarian plays. He could be early – like he was with his previous Nvidia put that he apparently closed before the stock kept rallying.
The real question is whether this AI “bubble” has more room to run or if Burry’s finally caught the top. With Nvidia up 46% year-to-date and Palantir up 157%, even a modest correction could make those put options incredibly profitable. But if the AI revolution keeps delivering, he could be leaving billions on the table. Either way, when the ‘Big Short’ guy starts betting against the market’s favorite narrative, it’s worth paying attention.
