Michael Burry bets nearly $1 billion against AI stocks: the 2008 visionary's downturn

What seemed to be an inevitable bullish call on the AI sector is beginning to show the first cracks. Michael Burry, the investor who already foresaw the 2008 housing market collapse, has returned to do what he does best: sniff out bubbles. According to Q3 2025 data, Burry has accumulated a massive short position, approximately $1 billion in put options, directly betting against key tech companies like Nvidia and Palantir.

A legendary investor who sees danger where others see opportunity

Burry’s footprint in the market is not just a simple bet: it’s a strong signal of doubt about the sustainability of the AI sector’s valuation. Those who already predicted one of the biggest financial crises of the decade are not mistaken so easily. This time, his target is the excess enthusiasm around artificial intelligence and related technology.

Burry’s concerns were not casually thrown out there. He used social media to articulate his skepticism, highlighting how the economic fundamentals of AI might not justify the current valuation levels. In particular, he criticized the enormous amount of capital invested in AI hardware infrastructure, suggesting that growth may not be sustainable in the long term.

Nvidia’s counterattack and the intensifying debate

As expected, industry giants did not stay silent. Nvidia’s leaders responded by emphasizing solid revenue projections and seemingly strong business fundamentals. However, Burry’s skepticism continues to spread among more sophisticated investors, creating an evident tension between corporate optimism and market caution.

What makes Burry’s bet particularly noteworthy is that it’s not just an isolated speculative position. His move has drawn attention to fundamental questions: do current AI valuations truly reflect economic reality, or are we witnessing another tech bubble forming?

Echoes of the past: parallels with the dot-com bubble

The parallel with 2000 is no coincidence. Just like during the dot-com bubble, when startups without concrete profits were valued in the billions, today we see publicly traded tech companies at extraordinary multiples mainly based on future profit promises tied to AI. Burry is essentially suggesting that we are repeating the same mistakes.

The implications of this position go beyond Nvidia and Palantir. If Burry is right, significant revaluations could follow in the tech and AI sectors. Valuation pressures might lead to market corrections, especially if AI profit promises turn out to be inflated or delayed in materializing.

The subtle message and the debate over AI’s economic fundamentals

What emerges from Burry’s bet is an increasingly widespread doubt: how many AI users are actually capable of generating meaningful economic returns, or are they artificially supported by external funding and incentives from providers? This question hits at the heart of the unlimited growth narrative that has driven the rally in the sector.

Regardless of the outcome of Burry’s bet, one thing is certain: the investor community is now more vigilant, and AI valuations will be scrutinized more closely in the near future.