According to Gizmodo, Michael Burry’s Scion Asset Management disclosed put options against Nvidia and an even larger position against Palantir in September 30 regulatory filings released Monday. Nvidia recently became the only company worth over $5 trillion, while Palantir’s stock surged 150% this year. Burry pinned a cryptic X post showing Christian Bale portraying him in “The Big Short” with text about bubble recognition. He later posted charts showing declining year-over-year cloud growth at Amazon, Alphabet and Microsoft from 2023-2025 versus 2018-2022, plus warnings about tech capex growth matching the 1999-2000 bubble. Palantir CEO Alex Karp called Burry’s move “egregious” and promised to “be dancing around when it’s proven wrong.”
<h2 id="bubble-warnings”>The Ghost of Dot-Com Past
Here’s the thing about Burry’s warning – it’s not just him seeing ghosts. The Bank of England recently said stock valuations look like the dot-com peak. Apollo’s chief economist noted the top S&P 500 companies are actually more overvalued than in the 1990s. And Burry’s not just talking – he’s putting real money behind this thesis.
That chart about declining cloud growth? That’s huge. Amazon, Microsoft, and Google basically are the cloud market. If their growth is slowing while AI hype keeps building, something’s got to give. We’re seeing every company from your local pizza shop to Fortune 500 giants slapping “AI” on their earnings reports. Sound familiar? It should – that’s exactly what happened with “.com” in the late 1990s.
The AI Circle Jerk
Burry’s third post showed what Bloomberg calls “circular dealmaking” with Nvidia at the center. Basically, all these AI companies are investing in each other. Nvidia sells chips to Microsoft, Microsoft invests in OpenAI, everyone uses Amazon’s cloud… it’s a giant circle of money flowing between the same players.
Now, this isn’t necessarily evil. But it does create systemic risk. When everyone’s success depends on everyone else succeeding, one crack can bring down the whole house of cards. We saw this with telecom after the dot-com bubble – thousands of miles of unused fiber optic cable buried in the ground because demand didn’t materialize fast enough.
What This Means for Everyone Else
So what happens if Burry’s right? For regular investors, it could mean another nasty market correction. For developers and startups banking on AI funding? Let’s just say the party might end abruptly. Enterprise companies pouring billions into AI infrastructure might find themselves with expensive systems and nowhere near the expected ROI.
But here’s the crucial point Burry himself acknowledges – the internet did eventually transform everything. The fiber optic cables eventually got used. The question isn’t whether AI has potential, but whether stock prices have gotten way ahead of reality. Are we building infrastructure for demand that’s years away? History suggests we probably are.
The real risk isn’t that AI fails – it’s that we overestimate how quickly it will deliver returns. When Burry posts cryptic warnings and backs them with real SEC filings, maybe we should at least pay attention. After all, this is the guy who made billions betting against conventional wisdom last time.
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