Michael Burry’s Big Short, AI Edition: Why the Man Who Bet Against the Housing Bubble Is Now Taking on Nvidia and Palantir

The man who saw the crash coming

If you’ve ever watched The Big Short, you already know Michael Burry — or at least Christian Bale’s version of him, hammering drums while betting billions against the housing market. Now, nearly two decades after his legendary call on the 2008 financial meltdown, Burry is back with a new contrarian play: shorting the AI boom.

On Monday, filings from his hedge fund, Scion Asset Management, revealed fresh bearish bets against Nvidia (NVDA) and Palantir (PLTR): two stocks that have become symbols of the market’s obsession with artificial intelligence. Scion holds put options on both, meaning Burry’s trades pay off if their stock prices fall.

The timing is audacious. Palantir had just raised its full-year revenue forecast to $4.4 billion after topping third-quarter estimates. Nvidia, meanwhile, is days away from reporting what could be another blockbuster earnings season.

And yet, Burry is betting both are flying too close to the sun.

Betting against the AI gods

Palantir’s stock has been on a tear this year (up more than 170%) but even its own good news didn’t stop a sell-off. Shares jumped 7% after its results on Monday, only to tumble 8% by Tuesday afternoon. The problem? Valuation.

Despite its growth, Palantir trades at earnings multiples that make even seasoned tech investors twitch. Its CEO, Alex Karp, has called the company’s US commercial division “a juggernaut,” but to Burry, that probably sounds like déjà vu from 2007, when everyone said housing prices could never go down.

Nvidia’s story is similar but bigger. It’s now the world’s most valuable company, worth more than $3 trillion. Its chips power everything from ChatGPT to self-driving cars, and its earnings have dwarfed Wall Street’s wildest expectations. But its dominance has also made it a lightning rod for regulation and geopolitical risk.

Just this week, President Trump told CBS News that the U.S. would block Nvidia from selling its most advanced chips to China, citing national security concerns. Nvidia’s shares promptly fell more than 2% in early trading.

If AI is the new housing boom, Nvidia might be the new mortgage bond — brilliant, essential, and possibly overbought.

Cassandra with a Bloomberg terminal

Burry isn’t exactly subtle about his worldview. His username on X (formerly Twitter) is “Princess Cassandra,” a nod to the mythical prophet cursed to see the future but never be believed. In late October, he posted:

“Sometimes we see bubbles. Sometimes there’s something to do about it. Sometimes, the only winning move is not to play.”

Attached was a still of Christian Bale playing him in The Big Short. In other words: he knows exactly how this looks.

His latest filings show Scion Asset Management overseeing roughly $155 million in assets — a fraction of his 2008 war chest, but enough to make waves. He’s not new to shorting overhyped tech either; in 2021, he bet against Tesla, though the stock doubled before eventually falling in 2022.

The sequel no one wanted—or maybe the warning we need

Burry’s latest move isn’t happening in isolation. Wall Street heavyweights — from Goldman Sachs’ David Solomon to Morgan Stanley’s Ted Pick — have been hinting at a market correction, warning that AI valuations look unsustainable.

Maybe Burry’s just hedging his reputation. Or maybe he sees the same manic euphoria that once surrounded mortgage-backed securities—only this time, the collateral is GPUs and data centres instead of subprime loans.

Either way, the man who made billions betting against the American dream is now betting against its next one: artificial intelligence. And if history rhymes, that drumbeat you hear might not be coming from Christian Bale’s office... it could be the start of another Big Short.