A US investor made famous by The Big Short appears to have closed his hedge fund after making a major bet against artificial intelligence (AI).
Michael Burry, who made his name by correctly predicting the collapse of the US mortgage market, has deregistered his firm, Scion Asset Management, with the US Securities and Exchange Commission (SEC).
Its status was “terminated” this week, removing federal government oversight, documents show. In a post on social media site X, Mr Burry said he was moving “on to much better things Nov 25”.
Hedge funds must register with the SEC if they are managing at least $100m (£75m) of investor money. The decision to deregister Scion means the firm will have to return funds to investors.
Mr Burry’s cryptic tweet has sparked speculation that he may be switching to running a family office, where he will invest his own wealth, requiring less oversight from federal bodies.
Burry’s bet against AI
The surprise move comes weeks after Mr Burry made a $1.1bn bet on a decline in the share prices of chipmaker Nvidia and software company Palantir, both seen as bellwethers of the AI boom.
Mr Burry said on X that he had bought contracts allowing him to sell Palantir shares at $50 apiece in 2027. He would make money if the company’s share price fell below that level. Its shares are currently worth $184.
Nvidia’s share price has fallen around 8pc since Mr Burry’s bets emerged. Palantir’s stock has dropped around 11pc over the same period, with its chief executive Alex Karp describing Mr Burry’s position as “bats— crazy”.
The short seller hit back, saying he was “not surprised” Mr Karp was not able “to crack” the filing detailing his bet against the AI software company.
Mr Burry rose to prominence after predicting the collapse of America’s mortgage-backed securities (MBS) market, which triggered the global financial crisis in 2007. He made a hugely profitable $1bn bet against the market, starting in 2005.
His story was detailed in Michael Lewis’s 2010 book The Big Short, which was later adapted into a 2015 film starring Christian Bale as Mr Burry.
After years of staying quiet on X, Mr Burry has recently begun warning about the financial system, posting at the end of October: “Sometimes, we see bubbles.”
His posts and bets against both Nvidia and Palantir have fuelled pre-existing fears that AI stocks have become overvalued.
