Big Short investor’s $1 billion bet against AI giants just rocked Wall Street
Remember 2008 when the housing market collapsed and wiped out Americans' retirement savings?
The investor who saw that crash coming just made a billion-dollar bet it's about to happen again.
And Wall Street's AI cheerleaders went into full panic mode after Michael Burry's shocking move went public.
The man who predicted 2008 just bet $1.1 billion against AI stocks
Wall Street had a meltdown when regulatory filings revealed Michael Burry's hedge fund Scion Asset Management took out approximately $1.1 billion in put options betting against Nvidia and Palantir.¹
If you saw Christian Bale play Burry in The Big Short, you know what this means.
The same investor who made a fortune predicting the 2008 housing collapse just wagered that today's AI boom is tomorrow's bust.
Nvidia shares crashed 2.5 percent, erasing $34 billion in value.²
That's billion with a "B" — gone in a single morning.
Palantir plummeted nearly 9 percent despite beating Wall Street's earnings expectations.³
The Dow dropped 410 points while the Nasdaq tanked 1.6 percent as investors stampeded for the exits.⁴
Think about what's in your 401(k) right now.
Chances are you own these stocks whether you know it or not.
Scion disclosed put options worth about $912 million betting against Palantir and $187 million against Nvidia as of September 30.⁵
Put options are Wall Street's way of betting a stock will crash.
When the price drops, Burry makes a killing.
Nvidia just became the first company ever to hit $5 trillion in market value.⁶
Palantir's stock had rocketed 176 percent this year before Burry's bombshell filing became public.⁷
Everyone thought these companies would keep climbing forever.
Burry's betting they're about to crater.
Days before the filings dropped, Burry posted a warning on X that should scare every investor: "Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play."⁸
Translation: Get out now while you still can.
He followed up with charts comparing the AI spending frenzy to the 1999-2000 tech bubble.⁹
https://twitter.com/MichaelJBurry__/status/1985463163865739741
That bubble vaporized $5 trillion when it popped.
One chart showed cloud revenue growth at Amazon, Microsoft, and Alphabet grinding to a halt.
Another exposed circular financing deals between Nvidia, OpenAI, and other AI giants.
These are the same kinds of schemes telecom companies used right before they collapsed in 2002.¹⁰
The smart money is already heading for the exits.
Palantir CEO has public meltdown over Burry's bet
Palantir CEO Alex Karp went on CNBC and lost it.
He called short sellers "bat**** crazy" live on national television.¹¹
"The two companies he's shorting are the ones making all the money, which is super weird," Karp sputtered.¹²
"The idea that chips and ontology is what you want to short is bat**** crazy."
Karp accused Burry of market manipulation and promised he'd be "dancing around" when Burry's bet fails.¹³
"With the shorts it's very complex… honestly I think what's going on here is market manipulation," Karp claimed.¹⁴
"We delivered the best results anyone's ever seen. It's not even clear he's not doing this to get out of his position."
That's what panic looks like.
When a CEO goes on TV ranting about market manipulation, he's scared.
Burry didn't dignify the meltdown with a response.¹⁵
He just let his track record do the talking.
Back in 2005, everyone thought Burry was nuts when he warned the housing market would collapse.
He made $100 million personally and generated $700 million for his investors by betting against mortgage-backed securities.¹⁶
Banks were so confident housing prices would keep climbing they practically handed Burry the tools to bet against them.¹⁸
Two years later, those same banks needed trillion-dollar bailouts from taxpayers.
Meanwhile, ordinary Americans lost their homes and watched their retirement accounts get cut in half.
Burry spotted the 2008 crash by doing something revolutionary — he actually read the mortgage contracts.¹⁷
He discovered banks were handing out loans to people who couldn't afford them, then packaging that garbage as AAA-rated investments.
When adjustable rates reset and borrowers couldn't pay, the whole house of cards collapsed.
Now he's warning the AI bubble is built on the same kind of fantasy.
Wall Street veterans are sounding the alarm
Burry isn't alone in warning about an AI bubble.
Goldman Sachs CEO David Solomon cautioned investors should expect a 10 to 20 percent market correction within the next year.¹⁹
"The rise in valuations and emergence of circular financing are among aspects that 'rhyme with previous bubbles,'" Goldman Sachs strategists wrote.²⁰
Apollo Global Management chief economist Torsten Slok argued the AI surge could eclipse the 1990s internet bubble.²¹
He pointed out the top 10 companies in the S&P 500 are now more overvalued relative to fundamentals than they were at the height of the dot-com era.
OpenAI CEO Sam Altman himself admitted investors are "overexcited about AI" and compared market conditions to the dotcom boom.²²
Alibaba co-founder Joe Tsai and legendary investor Ray Dalio have both issued warnings about the AI frenzy.²³
An MIT study dropped a bombshell: 95 percent of companies pouring money into AI are seeing zero returns.²⁴
Let that sink in.
Billions of dollars invested, nothing to show for it.
OpenAI is projected to lose $44 billion between 2023 and 2028 despite being valued at $500 billion.²⁵
The company expects to bring in $13 billion in revenue next year.
That won't even cover the red ink.
Companies are expected to burn through $250 billion on AI infrastructure in 2025 alone.²⁶
By 2028, that number could hit $2 trillion.
Most of this spending is being financed with debt.
When the bill comes due, someone's going to pay.
Spoiler alert: It won't be the billionaire tech CEOs who already cashed out at the top.
The numbers are absolutely insane.
Nvidia trades at 52 times earnings.²⁷
Palantir's price-to-earnings ratio recently hit 275.²⁸
Over the last 30 years, hot tech stocks have typically crashed when they hit 30 to 40 times sales.²⁹
Amazon and Cisco Systems both peaked at those levels right before the dot-com bubble exploded.
AI spending accounted for 1.1 percent of U.S. economic growth in the first half of 2025.³⁰
Just seven stocks — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — have driven 55 percent of the S&P 500's gains since 2022.³¹
Your 401(k) is probably loaded with these companies.
When valuations are this concentrated in a handful of stocks, a crash in those stocks takes down everything.
That's exactly what happened in 2000.
And 2008.
If Burry's right again, Americans who ignored his warning will watch their retirement savings evaporate just like they did 17 years ago.
The man who predicted the last crash is telling you another one is coming.
Wall Street's biggest names are backing him up.
The question isn't whether to believe them.
The question is what you're going to do about it before it's too late.
¹ Daniel Jones, "Big Short star Michael Burry's $1BILLION bet against tech giants shakes markets: 'We've seen this movie before,'" Daily Mail, November 4, 2025.
² Ibid.
³ Ibid.
⁴ Ibid.
⁵ Sinchita Mitra, "Michael Burry's 'Big Short' instincts target AI trade with puts on Nvidia, Palantir," Seeking Alpha, November 4, 2025.
⁶ "The 'Big Short' Investor Michael Burry Bets Against AI Hype," Gizmodo, November 4, 2025.
⁷ "Michael Burry, of 'Big Short' fame, discloses bets against Palantir and Nvidia," Yahoo Finance, November 4, 2025.
⁸ "'Big Short' investor Michael Burry follows up cryptic AI bubble warning with bearish stock activity on Nvidia and Palantir," Fortune, November 4, 2025.
⁹ Ibid.
¹⁰ "Big Short 2.0? Michael Burry Bets Against Nvidia, Palantir Stocks In Stark Warning Against AI Euphoria: 'Move Along,'" Stocktwits, November 4, 2025.
¹¹ Jones, Daily Mail.
¹² "Alex Karp blasts 'Big Short' investor Michael Burry as 'bats— crazy' for bets against Palantir, Nvidia," CNBC, November 4, 2025.
¹³ Ibid.
¹⁴ Ibid.
¹⁵ Ibid.
¹⁶ "Who is Michael Burry? 'The Big Short' investor who predicted the housing market crash," Fox Business, March 6, 2024.
¹⁷ "Mortgage Crisis in 2008 – How did Dr. Michael Burry predict the Crisis?" FinGrad, September 4, 2022.
¹⁸ "Who Is Michael Burry? 'The Big Short' Briefly Explained," Finbold, December 24, 2024.
¹⁹ Jones, Daily Mail.
²⁰ "Jamie Dimon is worried about a stock market correction," CNN Business, October 9, 2025.
²¹ "U.S. tech stocks slide after Altman warns of AI bubble and MIT study casts doubt on the hype," Fortune, August 20, 2025.
²² "OpenAI's Sam Altman sees AI bubble forming as industry spending surges," CNBC, August 18, 2025.
²³ Ibid.
²⁴ "Experts Warn of an Impending 2025 AI Stock Market Bubble Burst: A 'Toxic Calm Before the Crash,'" Financial Content, October 15, 2025.
²⁵ "This Is How the AI Bubble Bursts," Yale Insights, October 2025.
²⁶ "Experts Warn of an Impending 2025 AI Stock Market Bubble Burst."
²⁷ "Is the AI Boom Turning Into a Bubble? Here's What Smart Investors Should Watch," The Motley Fool, October 24, 2025.
²⁸ Ibid.
²⁹ "Prediction: The Artificial Intelligence (AI) Bubble Will Burst in 2025. Here's Why," Nasdaq.
³⁰ "Experts Warn of an Impending 2025 AI Stock Market Bubble Burst."
³¹ "Jamie Dimon is worried about a stock market correction," CNN Business.
