Michael Burry, the “Big Short” investor who famously shorted subprime mortgages before the 2008 crash, has again stepped into the role of Wall Street dissenter by revealing, in his Q3 2025 13F filing, about $1.1 billion in notional put options against AI darlings Nvidia and Palantir—roughly $187 million tied to 1 million Nvidia shares and $912 million to 5 million Palantir shares, even though he later clarified the real cash outlay was closer to about $10 million per name rather than a billion-dollar gamble.
In a series of posts on X and a long Substack essay, Burry argues that the AI boom resembles the late-1990s dot-com bubble, comparing Nvidia’s central role in today’s infrastructure build-out to Cisco’s during the tech mania and warning that cloud “hyperscalers” like Meta and Oracle are juicing reported earnings by quietly stretching the depreciable life of GPUs and servers from about three years to five or six, a move he says could understate depreciation by roughly $176 billion between 2026 and 2028 and inflate some firms’ profits by more than 20%.
He also targets what he calls “circular” AI money loops: big tech and chipmakers investing in or lending to AI startups and partners—such as OpenAI- or Anthropic-style deals—that then commit much of that capital to buying Nvidia GPUs and renting cloud capacity, echoing the vendor-financing and round-tripping tactics that helped fuel Enron-era excesses and, in his view, obscuring how much real, arm’s-length demand actually exists.
On top of that, Burry argues that Nvidia’s heavy stock-based compensation and massive buybacks mean “owner earnings” are far lower than headline profits, because a big chunk of cash returns merely offsets dilution rather than truly rewarding shareholders.
Nvidia fired back with a private seven-page memo to Wall Street analysts, denying that it engages in Enron-style vendor financing, stressing that its strategic investments are tiny relative to its revenue and that portfolio companies mostly earn from third-party customers, and rejecting claims that its financials resemble historic frauds.
The drama escalated when Palantir CEO Alex Karp went on CNBC to call Burry’s puts against Palantir and Nvidia “super weird” and “batshit crazy,” insisting Burry was shorting “the two companies making all the money,” prompting Burry to shoot back on X that Karp “cannot crack a simple 13F” and later to note that he has already exited the Palantir position (earning his gains).
Within days, Burry sent an October 27, 2025 letter announcing he would liquidate Scion Asset Management and deregistered the fund in mid-November, saying his sense of value no longer lines up with a market he views as bubble-prone, then pinned a WarGames quote—“the only winning move is not to play”—before relaunching as a paid Substack writer focused on dissecting what he calls AI-era accounting tricks.
Since his short thesis and the ensuing back-and-forth became public, Nvidia’s stock has slid roughly 14% from late-October highs and Palantir has dropped around 20%, turning the broader battle over whether the AI build-out is genuine free-market innovation or just another elite-engineered bubble built on stretched depreciation schedules, circular financing, and balance-sheet smoke and mirrors that could punish ordinary investors if profits disappoint later this decade.
