A hedge fund tycoon who featured in The Big Short has placed an £845million bet against the artificial intelligence (AI) boom.
Michael Burry (pictured), whose success in predicting the crash in the sub-prime mortgage market was depicted in the 2015 film, is now betting on falls in the shares of chipmaker Nvidia and data group Palantir.
The disclosure of his positions will fuel fears that the AI bubble is about to burst, sending stock markets around the world tumbling.
The tech-heavy Nasdaq fell 1.7 per cent in New York last night, while Palantir dropped 8 per cent and Nvidia slipped 4 per cent.
The sell-off came as the bosses of Wall Street investment banking heavyweights Goldman Sachs and Morgan Stanley warned that stock markets could be heading towards a ‘drawdown’ – or heavy fall.
Last month JP Morgan Chase chief Jamie Dimon said he was ‘far more worried’ about a market slump than many others.
Human intelligence? Michael Burry (pictured), who was depicted in the 2015 film, is betting on falls in the shares of chipmaker Nvidia and data group Palantir
James Kardatzke, co-founder of stock research platform Quiver Quantitative, said: ‘Michael Burry has a history of making large bearish bets when he perceives there to be a bubble, most notably prior to the housing market crash of 2008.
‘This new disclosure suggests that he now believes there is an AI bubble which is due to pop.’
The disclosure showed Burry’s investment firm, Scion Asset Management, has taken a £700million bet against Palantir and a £145million punt against Nvidia.
Nvidia shares have risen more than 13-fold since the start of 2023 on the AI boom, and it recently became the world’s first $5 trillion company.
Palantir is up around 30-fold in that time. Responding to Burry’s move, Palantir chief executive Alex Karp said a bet against chips and AI was ‘bats**t crazy’.
He told CNBC: ‘I do believe this behaviour is egregious, and I’m going to be dancing around when it’s proven wrong.’
Roman Stanek, chief executive of AI analytics group GoodData, said: ‘People keep asking if AI is a bubble, and will this bubble pop?
‘But AI isn’t a bubble – it’s a transformation. AI isn’t speculative, it’s compounding. You can’t uninvent intelligence. The companies waiting for the bubble to pop will wake up to find the world has moved on without them.’
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