'Big Short' Michael Burry bets $1B on AI bubble bursting (www.lbc.co.uk)

Michael Burry’s Scion Asset Management disclosed roughly $1.1 billion of positions tied to high-flying AI names, signaling a bet that the AI-driven rally is overheating. In a 13F filing Burry showed about $912 million in put contracts on Palantir and roughly $187 million of exposure to Nvidia (strike and expiration details weren’t disclosed). Puts give Scion the right to sell at a preset price, so the Palantir position is explicitly bearish; markets reacted—Nvidia slid ~2% and Palantir nearly 7% in pre-market trading after the news. The move matters because it’s a high-profile investor invoking the “Big Short” playbook against what he sees as an AI valuation bubble. Burry has been highlighting metrics—tech capex growth he says mirrors 1999–2000, slowing cloud demand—and the broader picture shows $161 billion poured into AI this year concentrated in a handful of firms. Critics point to academic work (MIT) and executives (OpenAI’s Sam Altman, Goldman’s CEO) warning many AI bets may not produce returns. Technically, a large, well-timed options position can amplify downside pressure on richly valued stocks; whether this precipitates a correction depends on timing, option expiries and whether fundamentals catch up with sky-high expectations (Nvidia >$5tn market cap; Palantir up ~400% year-over-year).