Michael Burry Bets $1B Against AI Giants: Market Reacts to Bearish Stance

Michael Burry's Scion Asset Management has taken a $1.1 billion short position against AI leaders Nvidia and Palantir, signaling a stark contrarian view amid the sector's rally. The move, disclosed in SEC filings, includes $912 million in puts against Palantir and $187 million against Nvidia—triggering immediate pre-market drops of 8% and 2% respectively.

The investor's return to social media after a two-year hiatus adds narrative weight, with cryptic bubble warnings and charts comparing current tech spending to 1990s excess. Both companies have been market darlings, with Nvidia's chips powering the AI revolution and Palantir's software dominating government contracts.

Burry's bearish bet echoes his prescient 2008 subprime short, though AI's fundamental adoption curve—from cloud infrastructure to blockchain oracle networks—presents a more complex valuation puzzle. The market's knee-jerk reaction underscores how celebrity investors still MOVE needles, even in algorithmic trading eras.