Key Takeaways:
- Michael Burry, the investor famed for “The Big Short,” is returning outside capital from his hedge fund, Scion Asset Management.
- The move follows Burry’s recent public criticism of the artificial intelligence (AI) investment boom, which he suggests is a bubble.
- Burry has specifically accused major AI companies, known as hyperscalers, of inflating their earnings.
- His decision is fueling debate among investors about the sustainability of the current AI-driven stock rally.
Michael Burry, the investor who rose to fame for predicting the 2008 financial crisis as chronicled in “The Big Short,” is making waves again. His hedge fund, Scion Asset Management, is returning capital to outside investors, a move that closely follows his bearish warnings about the booming artificial intelligence sector.
The decision has sparked widespread discussion about his motives and whether the celebrated value investor is signaling a major market downturn. For many, Burry’s actions are a closely watched barometer for potential economic turmoil.
A Vocal Critic of the AI Boom
In recent days, Burry has used social media to voice his skepticism about the AI-driven stock market rally. He has been particularly critical of the financials reported by hyperscalers—the large cloud computing companies at the forefront of AI development.
In a post on X (formerly Twitter), Burry claimed these tech giants are inflating their earnings, raising questions about the true value and profitability of the AI gold rush.
placeholder for tweet https://x.com/michaeljburry/status/1987918650104283372?s=20
— Michael Burry (@michaeljburry) November 18, 2025
This public declaration against one of the market’s hottest sectors provides crucial context for his decision to downsize his fund’s operations. By returning outside capital, Burry can operate with more flexibility and less public scrutiny, potentially positioning himself for another significant market bet.
The Legacy of ‘The Big Short’
Burry’s reputation was solidified by his incredibly profitable bet against the U.S. subprime mortgage market. His ability to spot deep-seated market irrationality long before others has given his market calls significant weight.
However, his fame has also made every move a public spectacle. His recent actions are being interpreted in two ways: either as a prescient warning of another impending bubble or as a sign that a legendary value investor is out of sync with a transformative technological shift.
As Scion Asset Management pivots to a smaller, more private operation, market watchers are left to wonder what “big short” Burry might be eyeing next. For now, his focus is clearly on the perceived froth in the AI market, and his decision to step back from managing public money speaks volumes.
Image Referance: https://www.bloomberg.com/opinion/articles/2025-11-18/does-mr-big-short-michael-burry-really-get-value-investing-or-ai