Michael Burry, the man who predicted the Great Financial Crash could soon be proven right again.
On Tuesday, Burry — who became a household name after anticipating the 2008 economic meltdown and inspiring the film "The Big Short" — had wagered more than $1 billion that Wall Street's AI boom will end in tears.
Now the cracks are showing. US tech stocks are on track for their worst week since Donald Trump's 'liberation day' tariffs rattled global markets in April.
Eight of the most valuable AI-driven companies — among them Nvidia, Meta, Palantir and Oracle — have lost a staggering $1.1 trillion in market value since the end of last week.
By midday in New York, the S&P 500 was down 1.2 percent, the Nasdaq 2 percent and the Dow 300 points, or 0.7 percent. The Nasdaq is on track for a 4 percent weekly loss, its sharpest decline since the Trump administration's tariff war years.
Burry specifically bet that the value of stock for Nvidia and Palantir — two of the market’s hottest AI plays — would fall, and those two have been hardest hit.
Shares of Nvidia — the world's most valuable company — tumbled another 4 percent Friday, leaving them down 13 percent for the week. Palantir has plunged 17 percent since Monday,
Filings show Burry's hedge fund, Scion Asset Management, disclosed put options worth about $900 million against Palantir and $187 million against Nvidia. A put option is a financial bet that pays off if a company's share price falls.
