Michael Burry, the hedge fund manager who made history via the film "The Big Short" for his visionary bet against the US housing market, has returned with another unconventional wager. This time, his target is Artificial Intelligence (AI). Through his firm, Scion Asset Management, Burry disclosed positions in put options with a total nominal value of approximately $1.1 billion against two of the biggest AI favorites: Palantir Technologies and Nvidia. The 13F filing for the third quarter of 2025 shows nominal put options of $912 million in Palantir and $187 million in Nvidia.
The details matter
Before one assumes that Burry is betting $1 billion on an AI crash, a quick clarification is necessary. The nominal value is not the amount Burry actually paid; it represents the total market value of the shares that these options could theoretically control. The actual premium paid for the Palantir position was approximately $9 million. This corresponds roughly to 1% of the headline amount. According to reports, the rights include longer-duration contracts expiring in 2027, with strike prices much lower than market levels at the time of disclosure. This means that Burry is not betting on a small price pullback. He is preparing for a significant repricing of these companies. Burry has publicly criticized AI companies for what he considers problematic dynamics in their return on invested capital (ROIC). In simple terms: these companies are spending huge amounts on building AI infrastructure, and Burry does not believe that revenue will justify the investment.
A pattern of unconventional conviction
During the 2008 financial crisis, his bet against securities based on subprime mortgages yielded approximately $100 million in profits for Burry himself and over $700 million for his investors. This transaction became the subject of Michael Lewis’s book and, subsequently, a feature film. More recent filings from early 2026 show that Burry is expanding his bearish exposure to technology, adding short positions in the semiconductor ETF SOXX, QQQ, Oracle, and Tesla. At the same time, he closed his position in GameStop.
Why crypto investors should pay attention
Burry's moves do not directly involve cryptocurrencies. There are no put options on Bitcoin nor shorts on Ethereum. However, crypto and tech stocks have shown an increasing correlation in recent years, especially during periods of risk-off sentiment. When the Nasdaq records a sharp sell-off, Bitcoin and other major digital currencies tend to follow, at least in the short term. The narrative surrounding AI has also acted as a tailwind for several sectors indirectly related to crypto. AI tokens, decentralized compute projects, and projects related to graphics cards (GPUs) have all benefited from the general enthusiasm surrounding artificial intelligence. If institutional investors begin to question the AI return dynamics, this skepticism could easily spill over into crypto projects that make similar promises regarding AI integration.
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