The AI Reckoning: Why Michael Burry Is Going All-In Against Nvidia and Palantir

The man who called the 2008 housing crash is back with a dire prediction—and this time he’s betting serious money that the AI boom will implode. Michael Burry has made a career out of spotting what others miss. His legendary short against the housing market didn’t just make him rich; it made him a symbol of contrarian investing. Now he’s channeling that same skepticism toward artificial intelligence stocks.

Last month, Burry went public with his latest thesis: Nvidia and Palantir Technologies, two companies that have collectively pushed the market cap to nearly $5 trillion, are heading for a crash. He’s backing up his conviction with approximately $10 million in put options—a bet that could balloon into over $1 billion if these stocks plunge as he expects.

The Bubble Blueprint

Here’s the thing about Burry: he’s not saying AI is fundamentally bad. His argument is more surgical than that. The market has lost touch with reality. He’s drawing parallels to the dot-com era, but with a twist—he calls it a “data-transmission bubble,” not a technology bubble. The mechanics mirror the housing bet that made him famous: excessive capital flowing into winners, unsustainable valuations, and accounting practices that mask the underlying weakness.

Burry’s concerns about Nvidia center on something specific: the company’s major customers (Oracle, Meta, and others) are being propped up by Nvidia’s own financing deals. According to Burry, this resembles how Enron used financial engineering to support vendors buying its products. If the companies backing these purchases start struggling, the domino effect hits Nvidia’s revenue directly. His price target? Nvidia falls roughly 37% to around $110 by 2027 from its current $190 level.

As for Palantir, Burry sees a different problem: over-reliance on government contracts and executive compensation that strains finances. He’s targeting a drop from roughly $200 to $50 per share by 2027. IBM’s competitive pressure adds another layer of risk in his view.

The Skeptics Strike Back

Not surprisingly, the market isn’t buying it—yet. Palantir CEO Alex Karp dismissed Burry on CNBC with blunt language, while Nvidia fired back with a formal statement defending its accounting integrity and underlying business strength. Both companies have reasons to fight back hard; their stock movements ripple across the entire AI ecosystem.

There’s also Burry’s recent track record to consider. His January 2023 “SELL” call was followed by Silicon Valley Bank’s collapse—but then the S&P 500 soared roughly 70%. He’s acknowledged that miss. On social media, critics joke he’s predicted 20 of the last two recessions. The timing problem is real: being right about a trend but wrong about the timeline is a slow death for any investor.

Michael Green, chief strategist at Simplify Asset Management, put it bluntly: Burry’s historical weakness is being early. Way early. “The question isn’t if this ends,” Green noted, “but how quickly.”

The Newsletter Gambit and Growing Influence

Burry closed his hedge fund and launched Cassandra Unchained, a paid newsletter on Substack. With 171,000 subscribers paying $379 annually, he’s turning his contrarian thesis into a direct-to-investor model. For context, that’s significantly cheaper than premium finance newsletters charging over $1,000 per year, making his bet-sizing strategy and analysis surprisingly accessible.

His followers—particularly on Reddit’s Burryology forum—dissect his every move. Some see a modern Cassandra warning of doom; others see a trend-chaser riding past glory.

What Happens If He’s Right?

If Burry’s thesis plays out, the implications extend far beyond two stocks. The $5 trillion combined valuation of Nvidia and Palantir represents a meaningful chunk of AI-driven market gains. A significant correction could reshape how capital flows through the sector, potentially exposing weaker business models and unsustainable growth narratives.

The real test arrives in 2027. Until then, expect continued volatility, heated debate, and Michael Burry doing what he does best—making everyone deeply uncomfortable about where we are in the market cycle.