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Michael Burry’s AI Bet: The Big Short 2.0 or Just Smoke?

  • Writer: Girish Appadu
    Girish Appadu
  • Nov 14
  • 2 min read

When Michael Burry moves, markets take notice. The man who foresaw the 2008 housing collapse has just made his boldest play of the decade and then walked away.


The Move


  • $9.2M in Palantir put options expiring in 2027.


  • Bearish positions in Nvidia and other AI leaders.


  • A potential payout of $240M if the AI hype cracks.


And then, the shocker:


Burry liquidated Scion Asset Management, terminated its SEC registration and named Phil Clifton as his successor. In a letter dated 27 October, he wrote:


"My estimation of value in securities is not now, and has not been for some time, in sync with the markets."


This is classic Burry; exit before the smoke is visible.


The Theory Behind the Bet


Burry is not betting against AI technology. He is betting against the maths.


His thesis: Big Tech’s AI boom is built on accounting illusions.


  • Hyperscalers are extending GPU/server “useful life” from 2–3 years to 6–10 years.


  • This inflates profits by an estimated $176B through 2028


  • Lower depreciation → Higher EPS → Valuations on shaky ground


  • Take Palantir: 287× forward P/E versus a sector norm of around 30×.


  • To Burry, that is not innovation. It is 2007 energy in GPU form.


Why It Matters


  • Big Tech’s 2025 AI capital expenditure is projected at $200B+, while segment growth rates hover below 20%.


  • Data centres could consume 1% of global electricity by 2027.


  • Unless AI delivers massive productivity gains quickly, something doesn’t add up.


Two Possible Futures


Scenario 1: The Great Unwind


  • AI valuations collapse by 20–50%


  • Nasdaq sheds trillions in market capitalisation


  • Hyperscalers face massive write-downs


  • GPU supply chains seize under excess inventory


Scenario 2: The AI Boom


  • Productivity leaps across industries


  • Enterprise adoption accelerates exponentially


  • Capital expenditure compounds into a trillion-dollar infrastructure


  • AI becomes as indispensable as electricity


Intrasia Wealth Perspective


Michael Burry is not shorting AI technology. He is shorting the narrative.

The story of infinite growth built on accounting illusions and stretched assumptions.


History shows Burry exits before the cracks appear.


The AI era is not over but its opening act may be.


Investors should brace for volatility. The next chapter will separate hype from hard value.


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