Michael Burry, the hedge fund manager who famously bet against the US housing market in 2008, and was portrayed by Christian Bale in 2015’s The Big Short, has disclosed bearish wagers on Nvidia and Palantir Technologies, based on his belief that the economy is in an AI bubble.
Bloomberg reports that in a series of 13F regulatory filings released on Monday, Michael Burry’s Scion Asset Management revealed that it had bought put options on Nvidia and Palantir, indicating a bearish stance on the two companies. The disclosures came just days after Burry posted a cryptic warning to retail investors about market exuberance on social media, including an image of his character from The Big Short movie and a warning that “sometimes, we see bubbles.”
Shares in Palantir, which had recently raised its annual revenue outlook, fell by 6.8 percent in morning trading following the news, as analysts pointed to the stock’s soaring valuation. Nvidia shares were also lower, slipping as much as 2.79 percent.
Investor concerns have been on the rise for months, as a wave of circular deals involving OpenAI, Nvidia, and other AI-focused firms sparked worries that the AI boom is being artificially propped up. Burry’s bearish wagers on these companies have further fueled these concerns.
This is not the first time Burry has taken a bearish stance against Nvidia. During the first quarter, Scion disclosed that it had liquidated almost its entire listed equity portfolio and bought put options on the chip giant, as well as a handful of US-listed Chinese tech giants.
Burry’s first-quarter filing included an additional disclosure stating that the puts being disclosed “may serve to hedge long positions which are not eligible to be reported” in the 13F. However, Monday’s third-quarter filing did not include a similar statement.
The hedge fund manager’s recent social media activity has also drawn attention, with Burry posting a series of images to his account on Monday evening, including a graphic from a Bloomberg News story on circular financing concerns surrounding Nvidia and other firms.
In October, Jeff Bezos argued that AI is part of an “industrial bubble.” According to Bezos, in an industrial bubble, all ideas get funded. He explained, “The good ideas and the bad ideas. And investors have a hard time in the middle of this excitement, distinguishing between the good ideas and the bad ideas. And that’s also probably happening today.”
Bezos added, “But that doesn’t mean anything that is happening isn’t real. AI is real, and it is going to change every industry.”
Read more at Bloomberg here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
