The 'Big Short' Guy Just Bet $1.1 Billion Against AI Giants

Michael Burry, famed for predicting the 2008 financial crisis, has placed a $1.1 billion short position against AI stocks Nvidia and Palantir Technologies, claiming they are in bubble territory. His fund holds significant put options, constituting 80% of Scion Asset Management's portfolio as of September 30. Following this announcement, both Nvidia and Palantir experienced sharp declines in their stock prices, with Palantir dropping as much as 16% before closing down approximately 8%. The impact extended beyond the U.S., with international markets also reacting negatively to Burry's actions. Executives from major Wall Street firms warned of potential corrections in equity markets, forecasting declines of 10% to 20%. Palantir's CEO criticized Burry’s short bet as irrational, suggesting it would motivate the company to improve performance. This strategic move has injected new volatility into the AI sector, prompting investors to reassess the valuation and risks associated with highly speculative AI stocks, further complicating the broader market metrics.

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