- Michael Burry's latest statements add to concerns about the valuations of artificial intelligence companies.
- Nvidia and Palantir come under scrutiny as investors react to Burry's bearish stance
- Pat Gelsinger's comments add to the growing sentiment that AI valuations appear to be overvalued.
The growing debate over the stability of artificial intelligence valuations has intensified in recent weeks as the market becomes increasingly dominated by artificial intelligence companies.
The starkest warning comes from a man whose name remains inseparable from the events of 2008, when the collapse of subprime mortgages triggered the global financial crisis.
Michael Burry, whose actions during the mortgage crisis became the center of a blockbuster film Big Short Tradehas taken a new stance that shows his deep skepticism of the current artificial intelligence boom.
Berry's bets again focus on inflated expectations
Recent financial disclosures show that Burry's firm, Scion Asset Management, has taken large positions in options tied to… Nvidia and Palantir, which have a face value of more than $1 billion.
These positions suggest he sees downside risk in the stock prices that many see as the backbone of AI's growth.
While Scion has also taken short positions in non-AI companies, it is the scale of these AI-related positions that has attracted the most attention.
This is because they reflect his willingness to challenge market consensus during previous speculative cycles.
These documents only cover activities until the end of September 2025, so it remains unclear whether he has already changed his position, although time itself has already intensified public debate.
The renewed focus on Burry comes as concerns about cyclical finance grow.
Nvidia was at the center of several agreements that were considered unusually structured, including deals involving xAI and AMD and OpenAI have also formed partnerships that combine hardware supply with equity participation.
Such patterns reinforce the view that valuations may be driven by momentum rather than clear long-term earnings expectations.
They also come at a time when companies are committing large budgets to data center extension, advanced CPU integration and hardware needed to support demanding Artificial Intelligence Tools.
Former Intel CEO Pat Gelsinger also said the artificial intelligence sector is in bubble territory, although he believes the correction could happen gradually rather than suddenly.
His comments signal a belief that the sector's revenue patterns are lagging far behind the pace of investment, raising questions about whether current spending levels will ever be justified by revenues.
Meanwhile, the market reaction showed renewed volatility, with Nvidia and Palantir experiencing sharp declines as investors reassess risks.
Despite Berry's reputation, not everyone agrees with his assessment.
Perhaps unsurprisingly, Palantir CEO Alex Karp has publicly dismissed bubble warnings in blunt terms, insisting that AI-driven economic growth will eventually meet current estimates.
Whether Burry will again signal structural risk by beating the market, or simply reacting to short-term sentiment, will become clearer as the sector moves from rapid expansion to measurable results.
For now, the tension between optimism and caution remains, leaving investors to interpret the signals of a man whose past forecasts changed the financial story.
By using Tom's Equipment
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