Billions of dollars in doubt: Michael Burry shields himself from the AI surge

Michael Burry is once again in the spotlight as research for Q3 2025 has revealed. This legendary investor, whose calculations predicted the 2008 real estate crisis, is now establishing a significant hedge of nearly one billion dollars — all to protect himself from a decline in AI stock prices.

Burry’s Big Bet: One Billion Dollars in Downside Protections

The strategy is clear and ambitious. Burry has allocated close to a billion dollars into put options — a kind of insurance against a downturn — targeting major corporate teams such as Nvidia and Palantir. This decision is not accidental. Burry warns on social media about what he calls a “crazy” level of investment in AI hardware without real economic justification.

His outlook is sharp: most companies are financed through sales channels of their providers, and actual demand remains “ridiculously small.” This analysis follows Burry’s well-known approach — numbers don’t lie, and market estimates can be deeply distorted.

How the Industry Reacts to Burry’s Position

Executives of large tech corporations quickly responded. Nvidia tried to calm the market with clear messages about future revenues and stability. However, Burry’s move is beginning to create a wave of doubt. Investors are now considering: is the growth of AI truly justified, or are we facing a new tech bubble?

This tension potentially triggers market corrections. Stock prices like Nvidia and Palantir are already showing signs of oscillation, directly linked to the media attention surrounding Burry’s bet.

Parallels with the Dotcom Tech Crisis

Burry’s approach activates historical memory. In the early 2000s, excessive investment in internet technology led to a spectacular crisis. Billions disappeared during the market correction. Today, the AI sector is receiving a similar level of capital, but with disproportionately less economic validation.

Analysts note: if AI turns out to be just another tech disappointment, the correction could be significant. Investors seek safety — they want to know if the current enthusiasm is justified or just a new version of the dotcom bubble with a different number.

Burry’s billion-dollar position is no longer just a private decision — it has become a statement about the future of the market and a reasonable skepticism toward overvaluations.