- Michael Burry’s latest positions reinforce concerns over valuations across AI companies
- Nvidia and Palantir face scrutiny as investors react to Burry’s bearish stance
- Pat Gelsinger’s comments add weight to the growing belief that AI ratings look overheated
The growing debate over the stability of AI valuations has intensified in recent weeks as the market becomes increasingly dominated by AI companies.
The starkest warning yet comes from a figure whose name remains inseparable from the events of 2008, when the subprime mortgage collapse triggered a global financial crisis.
Michael Burry, whose actions during the subprime crisis became central to the blockbuster The Big Shorthas taken new positions that show his deep skepticism about the current AI boom.
Burry’s bet renews focus on overheated expectations
Recent financial disclosures show that Burry’s firm, Scion Asset Management, has opened large option positions tied to Nvidia and Palantir, with a notional value of over $1 billion.
Those positions suggest he sees downside risk in stocks widely viewed as pillars of the AI rally.
Although Scion also opened shorts in companies outside the AI arena, the scope of these AI-connected positions has attracted the most attention.
This is because they reflect his willingness to challenge market consensus during previous speculative cycles.
Those filings only cover activity until the end of September 2025, so it remains unclear whether he has already moved, though the timing alone has heightened the public debate.
The renewed focus on Burry comes at a time when concerns about circular economy conditions are increasing.
Nvidia has been at the center of several arrangements seen as unusually structured, including deals involving xAI, and AMD and OpenAI have also formed partnerships that combine hardware supply with equity exposure.
Such patterns reinforce the view that valuations may be driven more by momentum than by clear, long-term revenue expectations.
They also emerge at a time when companies are devoting large budgets to data center expansion, advanced CPU integration and hardware needed to support demanding AI tools.
Former Intel chief Pat Gelsinger has also said the AI sector is in bubble territory, although he believes the correction may be gradual rather than sudden.
His comments show a belief that the sector’s revenue models are lagging far behind the pace of investment, raising questions about whether current levels of spending will ever be justified by returns.
Meanwhile, market reactions have shown renewed volatility, with Nvidia and Palantir both experiencing sharp declines as investors reassess exposure.
Despite Burry’s reputation, not everyone agrees with his assessment.
Perhaps unsurprisingly, Palantir CEO Alex Karp publicly dismissed bubble warnings in blunt terms, insisting that AI-driven economic expansion will ultimately justify current valuations.
Whether Burry is again signaling structural risk ahead of the market or simply reacting to short-term sentiment will become clearer as the sector moves from rapid expansion to measurable results.
For now, the tension between optimism and caution continues, leaving investors to interpret signals from a figure whose past predictions reshaped financial history.
Via Tom’s hardware
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