Echoes from 2000: Burry Bets $900M Against $5 Trillion AI Valuations

Michael Burry, the investor renowned for his role in the "Big Short," has made a significant wager against

Technologies (PLTR) and (NVDA), targeting two leading companies in the artificial intelligence industry. According to a recent regulatory disclosure from Scion Asset Management, Burry’s investment firm, the fund holds five million put contracts on Palantir and one million puts on NVIDIA, representing $912.1 million and $186.58 million in market value, respectively, as reported by . This action highlights increasing doubts about whether AI company valuations can be sustained, especially as Palantir and NVIDIA continue to form major partnerships and expand their reach in both enterprise and government sectors, as mentioned in the .

The alliance between NVIDIA and Palantir, revealed in October 2025, has fueled recent enthusiasm for both companies. Their collaboration brings together NVIDIA’s GPU-powered computing, CUDA-X libraries, and AI models with Palantir’s AI Platform (AIP), with the goal of providing real-time intelligence for industries like logistics, healthcare, and finance, according to a

. Palantir’s capabilities will be further strengthened by NVIDIA’s Blackwell architecture, which will streamline AI processes for complex operations, as detailed in the Watcher.Guru report. Palantir’s CEO, Alex Karp, highlighted the partnership’s ability to "deliver immediate, asymmetric value to customers," while NVIDIA’s Jensen Huang emphasized the benefits of merging Palantir’s platform with NVIDIA’s technology.

Despite this, Burry’s pessimistic outlook points to worries about inflated valuations and possible execution challenges. Palantir’s share price has climbed 169% so far this year, pushing its market cap to $471.6 billion, while NVIDIA’s valuation soared to a record $5 trillion, according to a

. Some analysts argue that Palantir’s current valuation is high compared to its peers and internal fair value estimates, with certain models indicating the stock is over 60% above its fair value, as per a . NVIDIA, too, faces questions about its dominance in the AI chip market and potential regulatory issues, including concerns over its GPUs being used by the Chinese military, as discussed in a . Burry’s recent posts on social media, where he referenced an "AI bubble" and drew parallels to the tech boom of 1999-2000, further reflect his cautious stance, as covered by Benzinga.

Institutional investors have sent mixed signals as well. Dutch fund Cardano Risk Management B.V. boosted its NVIDIA investment to $1.21 billion in the second quarter, making it the fund’s largest holding, according to a

. Cascade Investment Group Inc. also increased its position in NVIDIA, showing continued institutional optimism about the chipmaker’s future, as noted in . However, Burry’s substantial short positions stand in contrast to these bullish moves, underscoring the differing perspectives on the short-term outlook for the AI sector.

The outcome of the partnership will depend on Palantir’s success in expanding its AI offerings to more enterprise clients and NVIDIA’s ongoing advancements in accelerated computing. Palantir’s Q2 2025 earnings, which included $1 billion in revenue and 48% year-over-year growth, have reinforced its reputation as a leader in AI adoption among government and business clients, as reported by Yahoo Finance. Still, the company’s heavy reliance on government contracts and high expectations for performance present risks, especially if demand drops or competition heats up, a point raised in the Simply Wall valuation.

As the competition in AI intensifies, Burry’s short positions in Palantir and NVIDIA may mark a critical juncture for the industry. While the collaboration between the two companies is a major step toward integrating AI into operations, investors remain split on whether current prices are justified by future growth or driven by speculation. With AI investment expected to rise sharply, the coming months will reveal whether these companies can maintain their momentum and whether Burry’s contrarian approach proves correct.