"Michael Burry, who famously shorted the US housing market before its collapse in 2008, has bet over $1 billion that the share prices of AI chipmaker Nvidia and software company Palantir will fall - making a similar play, in other words, on the prediction that the AI industry will collapse. According to the Securities and Exchange Commission filings, his fund, Scion Asset Management, bought $187.6 million in puts on Nvidia and $912 million in puts on Palantir, as CNN reports."
"It's a major vote of no confidence in the AI industry, highlighting growing concerns that the sector is growing into an enormous bubble that could take the US economy with it if it were to lead to a crash. "This new disclosure suggests that he now believes that there is an AI bubble which is due to pop," Quiver Quantitative cofounder James Kardatzke told The Telegraph."
Michael Burry's Scion Asset Management purchased approximately $187.6 million in Nvidia puts and about $912 million in Palantir puts, totaling over $1 billion in short bets. The positions mirror his prior long-term bet against the US mortgage market before the 2008 crash. The trades reflect a belief that AI valuations have become excessively inflated and may collapse. Nvidia's market capitalization recently exceeded $5 trillion, while Palantir's valuation sits at over 200 times forward earnings. Recent share price declines and concerns about circular financing and flagging revenue growth have intensified fears of an AI bubble.
Read at Futurism
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