Scion Asset Management has disclosed that, as recently as September 30, it was betting big on the decline of AI-fuelled titans like Nvidia and Palantir. While we don’t often concern ourselves with stock market wrangling, this firm was founded and is still currently led by Michael J. Burry. The name may be familiar to moviegoers as the protagonist in The Big Short. In 2008, Burry famously predicted the seismic subprime mortgage crisis, cashing in on the ensuing financial crisis with a series of bold bets against the market.
Scion’s action, outlined today by Bloomberg, didn't come out of the blue. The founder’s personal Twitter/X account, Cassandra Unchained, forewarned that this financial strategy was unfolding last Friday – on Halloween.
Sometimes, we see bubbles.Sometimes, there is something to do about it.Sometimes, the only winning move is not to play. pic.twitter.com/xNBSvjGgvsOctober 31, 2025
As embedded above, Burry chilled those listening with his financial neo-Haiku. “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”
Sentiment regarding an AI bubble becoming ripe to burst has been growing in recent months as segment-related company values skyrocket. While many of these companies seem happy to invest billions and billions to chase the AI dream, it remains unclear how they will eventually monetize and claw back this expenditure.
News of dizzying circular deals has also raised suspicions. Recently, there have been multiple circular-feeling deals involving Nvidia at the center, like this one with xAI. Moreover, AMD and OpenAI recently signed a cozy GPU deal with stock involved.
These aren’t the charts you are looking for. You can go about your business. pic.twitter.com/ICldNUp2OINovember 3, 2025
Cassandra Unchained reminded followers of these circular relationships, just a few hours ago.
What has actually happened?
According to reports in the financial press, Scion bought options in Nvidia and Palantir in recent weeks. These options have a notional value of over $1 billion, so Burry stands to win big if they pay out. However, not all Scion’s shorts are in AI-exposed businesses, as the filings show bets were also placed against the likes of Halliburton Co. and Pfizer Inc. These positions were valid as of September 30, so it is possible that Burry could have sold or adjusted these positions since then.
Of course, we should also be careful not to jump to conclusions, as Burry might simply be using his ‘Cassandra’ reputation for short-term gains, not for altruistically warning folks of impending disaster...
Today has seen Nvidia shares dip as low as $200, with the price currently down 2.2%.
Palantir is feeling harder hit, with shares dipping as low as $185. It has recovered somewhat at the time of writing, but remains 6.7% down.
Reeling under the significant impact of short sellers this morning, Palantir CEO Alex Karp has been on CNBC, dismissing Burry's talk of an AI bubble as "batsh*t crazy" in a clearly panicked tone. See embed below at 2m8s.
Nvidia: the AI gold rush shovel maker
We think Nvidia may be less vulnerable to an AI bubble bursting than many pure AI plays. Remember, it has been in the enviable position of profiting from making shovels during this gold rush. The worst hit, when the day comes, will surely be those AI firms trading mostly on the promise of ‘jam tomorrow.’
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