Michael Burry increases short positions against major AI stocks

Investor Michael Burry, known for his role in ‘The Big Short’, is increasing his short positions against major artificial intelligence-related companies. Burry has expanded his negative bets on Nvidia, Oracle, Palantir, and Nebius, with Caterpillar also appearing on his list. Excluding put options, short positions now constitute more than 21 percent of his portfolio.

Regarding Nvidia, Burry does not question the company's current profitability or market dominance in AI chips. Instead, he expresses skepticism toward market assumptions that Nvidia can maintain extreme margins and a near-monopoly for years. He anticipates that increasing capital expenditures for new investments may reduce the cash available to shareholders.

Further concerns involve the nature of AI demand. There are warnings that chip demand may be supported by complex financing structures. In some instances, Nvidia has provided residual value guarantees for projects, such as a data center campus in Ohio, to facilitate financing. Critics suggest this creates a cycle where capital flows into the AI ecosystem and returns to Nvidia as revenue, potentially obscuring how much demand stems from actual profitable AI usage versus debt-driven financing.