"AI Bubble Alert: 'The Big Short' Guy Shuts Down Hedge Fund Over Fears of Market Manipulation"
Michael Burry, the financier famously depicted in "The Big Short," has shut down his hedge fund Scion Capital amid concerns that the market is increasingly detached from fundamentals. The move comes after Burry publicly expressed his short positions against several high-profile companies, including Palantir and chip giant Nvidia.
Burry's most recent target is companies in the AI sector, which he believes is harboring a bubble. He points to a common fraud practiced by these firms, where they manipulate depreciation schedules for their chipsets. By inflating the useful lifespan of their technology from 2-3 years to 5-6 years, companies like Oracle and Meta are overstating their earnings by tens of billions of dollars.
Burry's calculations suggest that this practice will lead to an overstatement of earnings by $176 billion between 2026 and 2028. He shares charts and data to support his claims, which have been met with skepticism from some quarters. However, other short sellers have echoed his concerns, including Jim Chanos, who has pointed to cloud-based GPU provider CoreWeave as an example of this practice.
As the debate rages on, investors are starting to question how these AI firms will ultimately generate profits. In a recent private call, OpenAI's Chief Financial Officer Sarah Friar attributed the slowing growth to users spending less time with ChatGPT following new content restrictions.
The implications of Burry's claims are significant, and his decision to shut down Scion Capital may signal that he believes the risks outweigh the potential rewards. As one might say, "Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play."
Michael Burry, the financier famously depicted in "The Big Short," has shut down his hedge fund Scion Capital amid concerns that the market is increasingly detached from fundamentals. The move comes after Burry publicly expressed his short positions against several high-profile companies, including Palantir and chip giant Nvidia.
Burry's most recent target is companies in the AI sector, which he believes is harboring a bubble. He points to a common fraud practiced by these firms, where they manipulate depreciation schedules for their chipsets. By inflating the useful lifespan of their technology from 2-3 years to 5-6 years, companies like Oracle and Meta are overstating their earnings by tens of billions of dollars.
Burry's calculations suggest that this practice will lead to an overstatement of earnings by $176 billion between 2026 and 2028. He shares charts and data to support his claims, which have been met with skepticism from some quarters. However, other short sellers have echoed his concerns, including Jim Chanos, who has pointed to cloud-based GPU provider CoreWeave as an example of this practice.
As the debate rages on, investors are starting to question how these AI firms will ultimately generate profits. In a recent private call, OpenAI's Chief Financial Officer Sarah Friar attributed the slowing growth to users spending less time with ChatGPT following new content restrictions.
The implications of Burry's claims are significant, and his decision to shut down Scion Capital may signal that he believes the risks outweigh the potential rewards. As one might say, "Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play."
this guy burry's got some valid concerns but shutting down scion capital feels like a massive gamble 
if he really thinks the market's rigged and nobody else agrees with him then he should at least try to take his concerns to court or get regulatory attention instead of just bailing out.
! I mean, think about it, these companies are literally cooking the books on their depreciation schedules. It's like they're trying to create a facade that they're making tons of money when really they're just burning through cash 
. This whole thing smells like a bubble waiting to pop 
!
already! But, on a more positive note, think about all the good this can do - maybe people will start being more careful with their investments and not just follow the herd 
. It's crazy to me that some AI companies are even trying to fake out investors like this 
... I mean, what's next? Companies inflating their battery life on electric cars or something 
? Anyway, I'm still hopeful that this "AI bubble" thing will lead to some real innovation and progress in the tech space 
. We just need to keep an eye on it and make sure everyone's playing by the same rules 
. I looked up some charts on Yahoo Finance and it's crazy to see how Palantir's stock price has been inflating since 2019 
. If Burry is callin' foul on this practice, I'd say he might be onto somethin'.
. If Burry's right and they're just faking their earnings reports 
. Burry's got some solid data to back up his claims, so maybe we should all be keeping an eye on these companies 
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. I think Burry has some legit concerns here, but it's gonna be tough to convince people of the truth 
.
. And now he's warning everyone that AI firms are making a gazillion dollars off fake profits? That's just FUD (fear, uncertainty, and doubt) tactics trying to sell his own research 
. I mean, come on, what a flimsy excuse to downplay your own growth woes 
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, then that's a whole different story 
. Guess we'll just have to wait and see if Burry's bearish bet pays off - or if he's just trying to short-sell his way to retirement 
anyway, scion capital shutting down is a big deal 
.
. Someone needs to call foul on these guys and make them prove their claims. Until then, I'll just keep an eye on Burry and see where this all goes 
[GIF of a person doing a confused face](https://giphy.com/gifs/confused-face-5uO6jT-8V3C8c)
[Image of a person hiding behind a curtain](https://i.imgur.com/2w6Pv7R.png)
and btw, what's up with openai trying to limit chatgpt's growth? are they just trying to prop up their own flagging profits? 
The algo overlords 
. I've been following Burry's work for years, and his track record is 
. He's got some serious guts to take on the big players 
.