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"Big Short" Investor Michael Burry Bets $10 Million Against AI Stocks

  //stocks-investing.news-articles.net/content/202 .. ael-burry-bets-10-million-against-ai-stocks.html
  Published in Stocks and Investing on Monday, December 29th 2025 at 11:12 GMT by Entrepreneur

The "Big Short" Investor Sees a Bubble in AI Stocks – And Is Betting $10 Million It Will Burst

Michael Burry, the famed investor who famously predicted and profited from the 2008 financial crisis (and immortalized by Christian Bale’s character in “The Big Short”), isn't convinced about the current hype surrounding Artificial Intelligence. In a bold move that echoes his previous successful short bets, Burry's firm, Scion Asset Management, has placed a significant $10 million wager against several leading AI-focused companies, believing their valuations are unsustainable and poised for a correction.

The Entrepreneur article details this bet, revealed through Scion’s latest 13F filing with the Securities and Exchange Commission (SEC). This filing provides a snapshot of how institutional investors manage their portfolios, although it's important to note that these holdings are reported quarterly and may not reflect current positions. The core of Burry’s position is a series of short sales targeting companies perceived as being overvalued based on the AI narrative.

Who Are the Targets?

The list of companies Burry is betting against includes several prominent names in the tech sector, many directly involved in developing or leveraging AI technologies. Notably, he's taken short positions in:

• Nvidia (NVDA): This semiconductor giant has been a major beneficiary of the AI boom, with its GPUs powering much of the training and deployment of large language models. Nvidia’s stock price has skyrocketed over the past year, making it one of the most valuable companies globally. Burry's short position represents a significant bet against this momentum.
• Advanced Micro Devices (AMD): A competitor to Nvidia in the GPU market, AMD also faces potential headwinds if AI enthusiasm cools down.
• Qualcomm (QCOM): This company is crucial for mobile technology and increasingly involved in AI processing on smartphones, making it another target of Burry’s skepticism.
• Marvell Technology (MRVL): A data infrastructure company benefiting from the increased demand driven by AI applications.

The sheer size of the $10 million bet underscores Burry's conviction. While this is a relatively small amount compared to Scion Asset Management's overall portfolio, it signals a clear and deliberate stance against what he sees as an inflated market. According to the Entrepreneur article, Scion’s total assets under management are around $16 billion, so this short position represents less than 0.1% of that total.

Burry's Reasoning: The Bubble Analogy

The article highlights Burry’s reasoning behind the bet, drawing parallels to the housing market bubble leading up to the 2008 financial crisis. He believes the current AI stock frenzy is fueled by hype and speculation rather than a realistic assessment of long-term value. While acknowledging the transformative potential of AI, Burry questions whether these companies can deliver on the lofty expectations baked into their valuations.

Burry’s concerns mirror those expressed in recent commentary about the AI market. Many analysts are questioning the profitability of AI applications and the sustainability of the current growth rates. The article references a note from Bank of America that suggests AI could be overhyped, with potential for disappointment as initial excitement fades. Furthermore, the intense competition within the AI space raises concerns about pricing pressure and reduced margins.

The "Big Short" Legacy & Current Market Context

Burry's previous success in predicting the subprime mortgage crisis has given his opinions significant weight. His willingness to challenge conventional wisdom and go against popular sentiment earned him a reputation as a contrarian investor, and his insights are closely watched by market participants. The Entrepreneur article emphasizes that Burry isn’t necessarily dismissing AI altogether; rather, he's pointing out what he believes is an unsustainable bubble in specific companies riding the wave of AI enthusiasm.

The current market environment adds another layer to Burry’s bet. Interest rates remain elevated, and economic growth is slowing, potentially dampening investor appetite for riskier assets like AI stocks. A broader market correction could trigger a sell-off in these high-flying names, validating Burry's short thesis.

Beyond the Bet: Broader Implications

Burry’s actions aren’t just about making money; they also serve as a cautionary tale for investors and companies alike. They highlight the importance of conducting thorough due diligence and avoiding speculative investments based solely on hype. The article suggests that Burry's bet could prompt other institutional investors to re-evaluate their AI holdings, potentially leading to increased volatility in the sector.

While it’s too early to declare an AI bubble burst, Michael Burry’s $10 million wager is a clear warning sign. It serves as a reminder that even revolutionary technologies are subject to market cycles and that valuations must ultimately be grounded in reality. Whether or not his bet pays off remains to be seen, but it has undoubtedly ignited a debate about the long-term sustainability of the AI boom and the risks associated with chasing hype in the stock market.

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