Scion's Burry: Bubble timing moved up

Michael Burry, who gained fame for shorting U.S. subprime mortgages in 2008, stated that the bubble formed by AI spending will burst earlier than his original benchmark, expressing greater confidence than before, with a downturn possibly arriving within a year. The original benchmark year was 2028.

In an article from late September 2026, he wrote that he is moving the timeline forward, thus providing more leverage for short positions. A better timeline makes leverage more acceptable. He cited analysis from Ares Management, pointing to a fragile connection between large capital expenditures and actual revenues, stating that a significant portion of data center capital expenditures is financed by debt.

Positions have shifted from direct shorting to put options. Micron's options have a strike price of about $500, expiring in June 2027, with an implied decline of over 50%. Nebius's strike price is in the double digits, also pointing to June 2027. Nvidia's options expire in September 2027, with a strike price in the mid-$100s, while the stock price was above $220 at the time of position building. Palantir's put options have been added with a strike price of about $100, expiring in September 2027. The semiconductor index fund SOXX has a strike price at a low of $400. Oracle and the Nasdaq 100 have also been included in similar positions.

On September 29, 2026, he wrote again that for the benefit of humanity, the market should decline significantly to prevent OpenAI and Anthropic from going public. He claimed these companies would siphon off and destroy trillions of dollars in capital, which is still a smaller part of the damage. OpenAI secretly submitted its IPO documents in June. Sam Altman stated that this year is not a good time for an IPO, with the target pushed to 2027.

Scion Asset Management is no longer reporting positions as a hedge fund. Semiconductor stocks and the Nasdaq have remained resilient even after he increased his put options. Micron fell after disclosure but remains well above the $500 strike price. The report did not provide the premiums and contract quantities for these options.

Burry, expressing a downturn with put options, contrasts with buyers who are still paying high valuations for chip, cloud, and model companies. The event-driven narrative arises from the mismatch between capital expenditures and revenues, not from the macro data of the day. The benefiting narrative falls on the premiums collected by option sellers, as long as the stock price does not fall to the strike price. The pressured narrative falls on Micron, Nvidia, Palantir, and model companies preparing to go public. He has previously claimed that downturns would occur earlier, but the market did not decline at those times.

Source: Public information