- Michael Burry’s latest positions intensify concerns about valuations across AI firms
- 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 valuations look overheated
Growing debate over the stability of artificial intelligence 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 crisis became central to the blockbuster movie The Big Short, has taken new positions that show his deep skepticism toward the current AI boom.
Burry’s bets renew focus on overheated expectations
Recent financial disclosures show Burry’s firm, Scion Asset Management, has opened large option positions tied to Nvidia and Palantir, with a notional value exceeding $1 billion.
These positions suggest that he sees downside risk in stocks widely viewed as pillars of the AI surge.
Although Scion also opened shorts in companies outside the AI arena, the scale of these AI-linked positions has drawn the most attention.
This is because they reflect his readiness to challenge market consensus during earlier speculative cycles.
These filings only cover activity through late September 2025, so it remains unclear whether he has already repositioned, although the timing alone has amplified public debate.
The renewed focus on Burry comes at a moment when concerns over circular financial relationships are rising.
Nvidia has been at the center of several arrangements viewed 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 appear at a time when companies are committing large budgets to data center expansion, advanced CPU integration, and hardware needed to support demanding AI tools.
Former Intel CEO Pat Gelsinger has also said that 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 lag far behind its investment pace, raising questions about whether current spending levels 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 direct 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 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, leaving investors to interpret signals from a figure whose past predictions reshaped financial history.
Via Tom’s Hardware
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