On August 12, the legendary ‘Big Short’ investor Michael Burry continued his busy trading week by unveiling a new series of long and short trades.
To begin with, the famous short trader invested in the medicine producer Zoetis Inc (NYSE: ZTS) at $73.60 and in the South American e-commerce giant MercadoLibre Inc (NASDAQ: MELI) at $1,850 per share.
Notably, ZTS has been trading relatively flat for months since it suffered a rapid 30% crash in May. Similarly, Burry’s latest long position in MELI equity appears linked to the 5.61% drop from $1,936.96 between August 11 and the Wednesday closing bell – below a fair valuation in the investor’s opinion.
Michael Burry increases his bearish bet against the AI ‘boom’
Elsewhere, Michael Burry appears to have extended his long-standing bearish – and arguably contrarian – bet on the wider artificial intelligence (AI) sector.
Specifically, the ‘Big Short’ trader added to multiple of his downward wagers, including Nebius (NASDAQ: NBIS) – a stock that soared more than 34% on Wednesday – Micron (NASDAQ: MU), Oracle (NYSE: ORCL), and the iShares Semiconductor ETF (NASDAQ: SOXX).
These bearish bets belong to a wider thesis regarding the instability of the AI ‘boom’ that Burry has been espousing for months.
So far, he has raised concerns about the overall scale and structure of the expenditure, but has also increasingly been looking into alleged accounting gaps and long-term commitments that could adversely impact various companies.
Why ‘Big Short’ Michael Burry is bearish on big tech
Earlier this week, Michael Burry made a shocking assessment of Palantir (NASDAQ: PLTR), claiming that the equity dilution via $5 billion in stock compensation, as well as locked-in infrastructure agreements, means investors are severely underestimating the risks and that PLTR’s fair value stands under $1.
Additionally, the ‘Big Short’ trader’s reaction to Nvidia’s (NASDAQ: NVDA) institution-backed infrastructure funding scheme was likewise negative.
While CEO Jensen Huang claimed the new plan eliminates fears over supposed circular financing, Burry claimed to hear echoes of Enron and alleged the move was something of a smoke-and-mirrors ploy to distract from the rocketing costs of insuring the chipmaker’s debt.
Indeed, analysts, investors, and other observers have been somewhat alarmed by what appears to be rampant circular financing within the AI industry.
The accusation, stemming from the fact that major hardware or cloud providers are investing in smaller firms that then purchase their products and services, has also been exacerbated by the apparent, profound unprofitability of OpenAI and Anthropic, and by a sector-wide reluctance to report relevant revenue and profits clearly.
For its part, Nvidia has vehemently denied the accusation to the point of issuing a ‘We are not Enron’ memo in 2025, and Jensen Huang recently wrote that his firm’s new initiative is ‘bringing independent, long-term institutional capital into the AI infrastructure market,’ explicitly to address circular financing concerns.
