- Michael Burry’s Latest Positions Intensify Concerns About AI Company Valuations
- Nvidia and Palantir face scrutiny as investors react to Burry’s bearish stance
- Pat Gelsinger’s comments add weight to growing belief that AI valuations appear 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 sharpest 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 mortgage crisis became central elements of the hit film. The big shorthas adopted new positions that show its deep skepticism towards the current rise of AI.
Burry bets renew focus on overheated expectations
Recent financial disclosures show that Burry’s company, Scion Asset Management, has opened large options positions linked to Nvidia and Palantir, with a notional value exceeding $1 billion.
These positions suggest he sees downside risk in stocks widely seen as pillars of the AI boom.
Although Scion also opened short positions in companies outside the AI space, the scale of these AI-linked positions has drawn the most attention.
This is because they reflect their willingness to challenge market consensus during previous speculative cycles.
These filings only cover the activity until the end of September 2025, so it is unclear whether it has already been repositioned, although the timing alone has amplified public debate.
The renewed focus on Burry comes at a time of growing concerns about circular financial relationships.
Nvidia has been at the center of several deals seen as unusually structured, including deals involving xAI, and AMD and OpenAI have also formed partnerships that combine hardware supply with equity exposure.
These patterns reinforce the view that valuations may be driven more by momentum than clear long-term earnings expectations.
They also come at a time when enterprises are committing large budgets to data center expansion, advanced CPU integration, and the hardware needed to support demanding AI tools.
Former Intel CEO Pat Gelsinger also said the AI sector is in bubble territory, although he believes the correction could happen gradually rather than suddenly.
His comments show a belief that the sector’s revenue models are far behind its pace of investment, raising questions about whether current spending levels will ever be justified by returns.
Meanwhile, market reactions have shown renewed volatility, with Nvidia and Palantir experiencing sharp declines as investors reassessed their exposure.
Despite Burry’s reputation, not everyone agrees with his assessment.
Perhaps not surprisingly, 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 risks ahead of the market or simply responding 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, forcing investors to interpret signals from a figure whose past predictions changed financial history.
Through Tom Hardware
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