The Big Short investor is doubling down on his bet that AI chip demand is heading for a reckoning
Michael Burry, the investor who became a household name by correctly predicting the 2008 housing crash, is expanding his short position against Nvidia, adding to put options first disclosed in late 2025 and broadening his bearish thesis across the entire semiconductor space.
The scope of Burry’s bearish bet #
Burry’s Scion Asset Management first disclosed NVDA put options valued at roughly $186.6 to $187 million in Q3 2025, equivalent to about 1 million shares. His July 2026 disclosures show he’s gone further, increasing the Nvidia short while also initiating or expanding put positions across Applied Materials (AMAT), Micron (MU), Tesla (TSLA), Caterpillar (CAT), and the iShares Semiconductor ETF (SOXX).
The Korean chip spending announcements reportedly influenced some of these moves. Nvidia shares have traded approximately 5% lower compared to the initial short-announcement day in November 2025. For context, his Palantir position in the same Q3 2025 filing was approximately $912 million, making his Nvidia short sizable but not his largest play at that time.
The depreciation thesis #
Burry’s thesis centers on the idea that hyperscalers, including Microsoft and Google, account for roughly 50% of Nvidia’s data-center revenue. The specific wrinkle he’s identified is about how those customers account for the chips they buy: these hyperscalers have been extending the depreciation schedules on their chip infrastructure, making expenses appear smaller each quarter while the assets age at the same rate.
Burry argues that chip technology advances rapidly enough that a GPU bought today might be functionally obsolete in three years even if depreciated over six, creating a gap between accounting reality and economic reality. If hyperscalers eventually confront this mismatch through write-downs or reduced future orders, Nvidia’s revenue could take a hit that current valuations don’t reflect.
Why investors should pay attention #
Burry’s expansion into shorting SOXX alongside individual names like Micron and Applied Materials suggests he sees the potential contraction as sector-wide rather than Nvidia-specific. It is also worth noting that Burry deregistered Scion Asset Management, which adds a layer of opacity to tracking his future moves. The positions disclosed in July 2026 may already have evolved.
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