- Michael Burry’s latest positions intensify concerns about AI company valuations
- Nvidia, 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 artificial intelligence valuations has intensified in recent weeks as the market is 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 hit film The big shorthas adopted new positions that show its deep skepticism of the current AI boom.
Burry bets refocus on overheated expectations
Recent financial disclosures show that Burry’s company, Scion Asset Management, has opened large options positions related to Nvidia and Palantir, with a notional value in excess of $1 billion.
These positions suggest he sees downside risk in stocks widely seen as pillars of the rise of AI.
Although Scion has also opened short positions in companies outside of the AI space, it is the scale of these AI-related positions that has garnered the most attention.
Indeed, they reflect his desire to question the market consensus during previous speculative cycles.
These files only cover activity until the end of September 2025, so it remains difficult to know whether it has already repositioned itself, even if the calendar alone has amplified the 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 considered unusually structured, including deals involving xAI, and AMD and OpenAI have also formed partnerships combining hardware supply and stock exposure.
Such trends reinforce the idea that valuations may be driven more by momentum than by clear, long-term earnings expectations.
They also appear at a time when companies are devoting significant budgets to expanding data centers, advanced processor 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 reflect a belief that the sector’s revenue models are lagging far behind the pace of investment, raising questions about whether current spending levels will ever be justified by returns.
At the same time, market reactions have shown renewed volatility, with Nvidia and Palantir both seeing sharp declines as investors reassess their exposure.
Despite Burry’s reputation, not everyone agrees with his assessment.
Unsurprisingly, Palantir CEO Alex Karp publicly dismissed bubble warnings in blunt terms, insisting that AI-driven economic expansion would ultimately justify current valuations.
It will become clearer whether Burry is once again signaling pre-market structural risk or is simply responding to short-term sentiment as the sector moves from rapid expansion to measurable results.
For now, the tension between optimism and caution persists, leaving investors interpreting signals from a figure whose past predictions have reshaped financial history.
Via Tom’s material
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