One short seller who predicted the 2008 housing crisis now appears to be betting against artificial intelligence

Michael Burry, the investor who rose to fame thanks to his bets against the US housing market before the 2008-09 crisis and subsequent Great Recession, appears to have a new short target: the artificial intelligence industry.

In its quarterly 13-F filing released this week, Burry’s Scion Asset Management disclosed that it had acquired put options, which guarantee the right to sell an asset at a certain price by a certain date, on a pair of AI heavyweights: Nvidia (NVDA) and Palantir (PLTR).

What does Bates Perry make, and what he has to say about artificial intelligence

According to the filing, Scion now has the right to sell 5 million shares of Palantir stock and 1 million shares of Nvidia stock, which at the time of filing had a total value of just $1.1 billion. The filing does not disclose the expiration date for the put options, so it’s not clear whether Burri is making a long-term or short-term bet that the stock will fall or the options are part of a more complex set of positions. The filings simply show the positions an investment company held at the end of the quarter, and these may have changed since the third quarter ended in September.

Palantir CEO Alex Karp responded to the news in a Tuesday interview with CNBC, calling the idea of ​​shorting Palantir and Nvidia “bat—crazy,” since they are the only two companies “making all the money” in the AI ​​sector. Karp said those handling short positions for Palantir, like Perry, may be engaging in “market manipulation.”

Posts from Burry’s X account have offered what appear to be mixed messages in the past week about how he feels about the AI ​​sector. Last week, Perry posted a photo of his character in the 2015 film The Big Short. With the message: “Sometimes, we see bubbles. Sometimes, there’s something to do about it. Sometimes, the only winning move is not to play.”

On Monday, Perry posted a trio of charts showing that cloud growth may have been higher for tech giants Amazon (AMZN), Alphabet (GOOGL), and Microsoft (MSFT) before the AI ​​craze began, highlighting dot-com-era like spending and the circular nature of the current world of AI funding.

After reports about Scion’s 13F surfaced Tuesday morning, Perry posted, “Fake news! I’m not 5’6″ (not that there’s anything wrong with that),” alongside a photo of himself with Christian Bale, who he portrayed in the movie “The Big Short.” The text of the post could indicate that Perry is implying that he is not a “short,” and in the same post he said that there is “nothing more fake” than “journalists reporting on 13Fs.” (Scion Asset Management did not respond to a request for comment seeking clarification on the put options and Burry’s postings.)

Why are some investors increasingly concerned about the AI ​​bubble?

Regardless of whether Puri is betting on AI trading cooling, other market watchers have identified a host of signs that the market may be in a bubble similar to the dot-com boom and bust at the turn of the century.

Some have cited the growing circular financing in the world of AI, with companies like Nvidia acting as an investor, supplier, and customer for companies like OpenAI, which makes ChatGPT and others. Others pointed to the sky-high costs of building and operating the data centers that serve as the backbone of the AI ​​industry, and questioned whether the tech giants would be able to generate enough revenue to offset their massive investments in infrastructure.