Posted on 11/04/2025 11:59:38 AM PST by E. Pluribus Unum
Wall Street was thrown into turmoil after it emerged investor Michael Burry has bet heavily against two of the world's biggest AI firms.
Burry, who became a household name after predicting the 2008 crash and inspiring the film The Big Short, is now wagering that the AI boom will end the same way — in a bust.
Nvidia, the planet's most valuable company, plunged 2.5 percent this morning with $34 billion wiped off its value. The Nasdaq and S&P 500 were also down.
Burry's move sent shockwaves through markets and sparked a furious reaction from Palantir boss Alex Karp, who branded the short sellers 'bat**** crazy' live on CNBC on Tuesday morning.
Filings show Burry's hedge fund, Scion Asset Management, disclosed put options worth about $900 million against Palantir and $187 million against Nvidia. A put option is a financial bet that pays off if a company's share price falls.
'The two companies he's shorting are the ones making all the money, which is super weird,' Karp raged on CNBC.
'The idea that chips and ontology is what you want to short is bat**** crazy,' he added, referring to Palantir's data 'brain' that links and interprets vast troves of information for its AI systems.
He accused short sellers of manipulating the market and said he would be 'dancing around' when their bets fail.
Michael Burry, founder of Scion Capital and the real-life investor behind The Big Short, has made a fresh billion-dollar bet against the AI boom. Here he poses for a portrait in Cupertino, California in September 2010
Palantir CEO Alex Karp on CNBC this morning, where he called short sellers ‘bat**** crazy’ in a fiery on-air rant
Palantir's stock was down this morning and after trying to recover was heading that...
(Excerpt) Read more at dailymail.co.uk ...
I’ll be buying more NVIDIA tomorrow.
Makes me wonder what Burry is seeing that that others are not seeing?
Burry got the housing crash right, but he isn’t magic.
Tesla: In the second quarter of 2021, Burry’s Scion Asset Management disclosed put options on Tesla, betting on a share price decline. However, the stock more than doubled within six months after he disclosed the position. While the stock later fell in 2022, his timing was off, and his initial bearish prediction failed to materialize.
GameStop: Burry famously invested in GameStop but sold his position well before the meme stock frenzy of 2021, missing out on the massive gains that followed.
Index Funds: In 2019, Burry warned that index funds were similar to subprime mortgage collateralized debt obligations (CDOs) and predicted an “ugly” outcome when the flows reversed. However, index funds continued to generate strong returns, proving his warning premature.
Market Crash Predictions (2021): In February 2021, Burry warned of a market crash driven by speculation and passive investing, a prediction that also did not come to fruition, as the market continued its bull run.
Bitcoin: In March 2021, Burry called Bitcoin a speculative bubble, but the cryptocurrency proceeded to rally to a record high in the following weeks.
S&P 500 (2023): Early in 2023, Burry tweeted “Sell,” only to later admit he was wrong as the market continued to rally.
Financial market smack talk indistinguishable from WWE pre-match antics!
Boy do we live in interesting times. 🤣
When the elephants are stomping around we ants need to run for cover.
Lol.
I am hoping it dies a hard death. (Disclaimer software engineer for 30 years).
The thing about short selling is that you could be “right” but if your timing is off, you could still be wiped out. Not for the faint hearted.
I don’t think we can trust the economic numbers.
Agreed.
just to clarify for everyone here, it’s NOT a billion dollar bet:
https://www.reddit.com/r/stocks/comments/1onqpk8/most_recent_13f_scion_asset_management_michael/
“A manager could hold deep out-of-the-money puts (e.g., strike price far below current market price).
These puts could be very cheap — even $0.01 per contract.
Yet the FEC 13F filing would still report the full notional exposure (e.g., 50,000 contracts × 100 shares = 5,000,000 shares), and the value field would reflect the market value of the underlying shares, not the actual cost of the options.
Implication
So yes — it’s entirely possible that:
Scion’s actual capital at risk in PLTR puts was far less than $912M.
The $912M figure in the 13F is not the cost basis or market value of the options, but rather the value of the underlying shares those puts represent.
This is a common source of confusion when interpreting 13F filings, especially for options positions.
Conclusion:
Burry could be holding 50,000 put contracts way OTM at 0.01 value per contract, representing a total cost basis of ONLY $50,000, and his 13F would still show the exact same information. What a fuchin joke.”
> The $912M figure in the 13F is not the cost basis or market value of the options, but rather the value of the underlying shares those puts represent.
Yes, at least someone here at reddit understands that.
I’m tired of seeing posts on reddit that he’s 80% short on his portfolio with palantir and nvidia puts. I’d be surprised if his exposure is > 15% of portfolio on these two puts.”
He's a gambler, betting can go either way. This morning, TSLA stock was at 449/share. Last year on Nov 4, 2024, it was at 244/share. That's a 84% increase in one year. And far greater increase than when Burry bet agains Tesla years ago. Predictions are that it will go over 600/share by end of 2025. Note that Musk is making heavy investments in Nvidia chips.
“Burry got the housing crash right, but he isn’t magic.”
And even if he’s fundamentally right, he doesn’t have a crystal ball on timing. He can look at situation and argue that NVDA’s $5 trillion market cap is unsustainable as other competitors eventually enter the space like what happened to Intel 20 years ago, and he might be right. But the problem with PUT options is that he not only has be right about what’s going to happen, he also has to be right about WHEN.
So-called “Artificial Intelligence” (AI) is already a bust. These firms, much like the dotcom firms, are vehicles for playing financial games, including money laundering.
There’s been this bubble forming for awhile. Thenonit question is, when will it deflate?
Nobody knows until it’s over.
In other words, Burry now sees bubbles everywhere and always. Often bubble-whisperers are never right again after their first, famous time.
well theres got to be two sides for every bet
Great, well-informed post. Burry's timeline is off. AGI will confirm the winner, but we got quite a bit to timeline before we get there, and this has every hallmark of trolling disinfo to quick-cash some expiring shorts, which seems to be endemic after October failed to produce an all-in cashout moment...not even triple-witching played out...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.