Burry's Bet Against the Bubble: Why This Hedge Fund Manager Shut Down His Entire Operation
Michael Burry, the infamous hedge fund manager and "Big Short" investor, has made a bold move by shutting down his entire operation due to concerns about a growing bubble in the AI sector. According to sources close to the matter, Burry's Scion Capital is liquidating its assets as he believes that the market has become detached from fundamental values.
Burry's concerns are not unfounded. He has been vocal about the supposed manipulation of financials by companies like Palantir and Nvidia, claiming that their depreciation schedules for chipsets are being fudged to make their products appear more valuable than they actually are. This practice, according to Burry, amounts to a common fraud in the modern era, where companies overstate the useful lifespan of their tech.
The issue at hand is twofold: first, Burry believes that these AI firms, which have been taking on significant investor funds and boasting massive valuations, are not generating profits as claimed. In fact, he estimates that earnings from these companies will be overstated by $176 billion between 2026 and 2028.
Burry's concerns have sparked skepticism among some in the industry. Palantir CEO Alex Karp, for example, has questioned Burry's motivations, suggesting that it is unusual to short a company that is reportedly making money hand over fist. Nevertheless, Burry's observations are not entirely isolated, with another short seller, Jim Chanos, pointing out similar practices by companies like CoreWeave.
The AI sector's growing bubble has already raised questions among investors about the sustainability of these companies' valuations. A recent private call between investors and OpenAI's Chief Financial Officer, Sarah Friar, shed light on this issue, as she attributed the company's slowing growth to reduced user engagement following the introduction of stronger content restrictions.
As the AI sector continues to expand, Burry's concerns about the bubble are starting to resonate with other stakeholders. Whether or not his predictions will prove accurate remains to be seen, but one thing is certain: this hedge fund manager has made a bold move by shutting down his operation in response to what he sees as a potential market anomaly.
"The only winning move," Burry said, "is not to play."
Michael Burry, the infamous hedge fund manager and "Big Short" investor, has made a bold move by shutting down his entire operation due to concerns about a growing bubble in the AI sector. According to sources close to the matter, Burry's Scion Capital is liquidating its assets as he believes that the market has become detached from fundamental values.
Burry's concerns are not unfounded. He has been vocal about the supposed manipulation of financials by companies like Palantir and Nvidia, claiming that their depreciation schedules for chipsets are being fudged to make their products appear more valuable than they actually are. This practice, according to Burry, amounts to a common fraud in the modern era, where companies overstate the useful lifespan of their tech.
The issue at hand is twofold: first, Burry believes that these AI firms, which have been taking on significant investor funds and boasting massive valuations, are not generating profits as claimed. In fact, he estimates that earnings from these companies will be overstated by $176 billion between 2026 and 2028.
Burry's concerns have sparked skepticism among some in the industry. Palantir CEO Alex Karp, for example, has questioned Burry's motivations, suggesting that it is unusual to short a company that is reportedly making money hand over fist. Nevertheless, Burry's observations are not entirely isolated, with another short seller, Jim Chanos, pointing out similar practices by companies like CoreWeave.
The AI sector's growing bubble has already raised questions among investors about the sustainability of these companies' valuations. A recent private call between investors and OpenAI's Chief Financial Officer, Sarah Friar, shed light on this issue, as she attributed the company's slowing growth to reduced user engagement following the introduction of stronger content restrictions.
As the AI sector continues to expand, Burry's concerns about the bubble are starting to resonate with other stakeholders. Whether or not his predictions will prove accurate remains to be seen, but one thing is certain: this hedge fund manager has made a bold move by shutting down his operation in response to what he sees as a potential market anomaly.
"The only winning move," Burry said, "is not to play."
. I mean, come on, $176 billion of overstated earnings? That's some juicy numbers. Maybe Burry should've stuck with his 'Big Short' days and left the AI game to the pros... or not 
. It's always entertaining to see a smart guy like Burry call out the Emperor's new clothes, even if it is for a relatively niche market. I'm sure the industry experts are just shaking in their boots 
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sounds like trouble. Companies raking it in but not really showing it? That doesn't add up. Burry's callin' out the fudged deprecation schedules and overstated earnings... maybe he's onto something 
. Palantir and Nvidia got some explaining to do. If AI firms are makin' a bunch of cash but investors don't see the money comin' in, that's a red flag. Burry's decision might be a wise one - playin' it safe when you think there's a problem 
at least burry has a track record of being right (remember big short?) so i think he knows what he's talking about.
. It's crazy how some companies are taking on billions of dollars in funding without showing any real profits. Burry's $176 billion estimate is actually pretty believable to me. I'd be surprised if his prediction isn't at least partially correct 
. Jim Chanos has been saying similar things about CoreWeave and other companies in the space. It just goes to show that Burry's concerns aren't entirely isolated 
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. Will Burry's predictions come true? Only time will tell 
. But for now, I think he made a smart move by shutting down Scion Capital 
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! I mean, I've heard some skeptical voices saying he's just trying to get back at Palantir and Nvidia, but honestly, have they ever looked into those companies' financials? 
. But I guess you can't deny the data – AI firms just don't seem to be delivering on their promises 
And it's not like these companies are even being transparent about their earnings, right? It's all smoke and mirrors.
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