The Contrarian Wager: Who Is Michael Burry and Why His AI Stock Bet Matters Now

Michael Burry, the legendary investor who correctly predicted the 2008 housing market collapse, is making waves again—this time by betting billions that the artificial intelligence bubble will deflate.

The man behind the massive housing market short has shifted his focus to what he views as the next financial reckoning. In November, Burry positioned himself against two tech giants: Nvidia and Palantir Technologies, companies whose combined market value has reached approximately $5 trillion and significantly boosted stock indices this year. His position isn’t casual—around $10 million in put options that could swell to over $1 billion if his predictions materialize.

Who is Michael Burry? From Housing Crisis Prophet to AI Skeptic

Before becoming a household name in investment circles, Burry earned his legendary status by recognizing systemic weaknesses in the housing market years before the 2008 financial crisis. His success spawned a devoted online following, with communities on platforms like Reddit dedicated to analyzing his every move. After maintaining relative silence for a decade, Burry recently closed his hedge fund and launched a Substack newsletter called “Cassandra Unchained,” which quickly attracted over 171,000 subscribers willing to pay $379 annually for his market insights.

This return to public prominence reflects a man compelled by what he perceives as profound market distortions.

The Case Against AI Valuations

Burry’s current thesis rests on a fundamental observation: the AI sector resembles the dot-com bubble more than legitimate technological advancement. During a podcast appearance with author Michael Lewis—whose work initially brought Burry to public attention—he clarified his position: “This bubble looks an awful lot like the dot-com bubble, which was not really a dot-com bubble. It was a data-transmission bubble.”

His concerns target specific vulnerabilities. For Nvidia, Burry highlights problematic financing arrangements where companies like Oracle and Meta receive support to purchase chips—a structure reminiscent of how Enron propped up its vendor base. He questions the durability assumptions embedded in chip depreciation schedules, suggesting companies inflate earnings through accounting practices.

Palantir draws criticism for its reliance on government contracts, executive compensation that Burry considers excessive, and mounting competitive pressure from established players like International Business Machines. His projection: Palantir falling to $50 per share by 2027, down from around $200.

The Timing Question: Burry’s Persistent Challenge

Yet here lies the familiar critique. Michael Green, chief strategist at Simplify Asset Management and himself a skeptic of investment trends, noted a recurring pattern: “Michael, if he had one failing in the dot-com cycle, it was being early to the process. The housing bubble? It was being early to the process.”

Burry’s recent track record provides ammunition for skeptics. His January 2023 “SELL” warning preceded Silicon Valley Bank’s collapse but preceded a subsequent 70% rally in the S&P 500. Markets have largely ignored his current warnings, though AI infrastructure concerns have gained traction in broader discussions.

Corporate Pushback and Market Dynamics

Both targets have firmly rejected his assertions. Palantir CEO Alex Karp dismissed Burry on television, questioning his judgment. Nvidia responded with formal statements emphasizing its “economically sound” underlying business and “complete and transparent” reporting. The chip giant further emphasized its reputation for integrity, directly addressing Burry’s accounting concerns.

Despite these defenses, Burry’s $10 million initial position could reach $1.1 billion if Nvidia declines approximately 37% to $110 by 2027. Stock movements since his November positioning have remained volatile rather than directional.

What Happens If He’s Right?

Should Burry’s predictions materialize, cascading effects would ripple through markets: compressed profit statements, falling equity valuations, and diminished capital investment would compress Nvidia’s growth trajectory. The domino effect would extend beyond these two companies, potentially triggering broader reassessment of AI-dependent valuations.

Michael Green observed that awareness of these critiques has paradoxically reinforced bullish conviction among some investors, who interpret resistance as validation that stocks possess unlimited upside potential.