Michael Burry, the legendary investor who famously predicted the 2008 financial crisis, has officially terminated his hedge fund Scion Asset Management's registration, marking a significant shift in his investment career. According to regulatory filings, Scion's status changed to "terminated" with the Securities and Exchange Commission effective November 10, eliminating the fund's requirement for future regulatory disclosures.
The End of an Era for Scion Asset Management
The closure comes after Scion managed approximately $155 million in assets as recently as March this year. Burry's investment moves have been closely watched by market participants for potential indicators of broader market trends. The decision to terminate the fund's registration follows Burry's cryptic social media post on Wednesday where he simply stated: "On to much better things Nov 25th."
Industry experts like Bruno Schneller of Erlen Capital Management interpret Burry's exit as signaling his disillusionment with current market conditions rather than a complete withdrawal from investing. Schneller suggests Burry might continue operating through a family office structure, allowing him more flexibility without the regulatory burdens of a registered fund.
Burry's Billion-Dollar Bet Against AI Giants
Before closing his fund, Burry had significantly intensified his scrutiny of technology giants, particularly targeting the artificial intelligence sector. The investor has taken major short positions worth nearly $1.1 billion against two of AI's biggest players: Nvidia and Palantir Technologies.
Renowned for identifying market bubbles before they burst, Burry now believes the AI frenzy could be the next major bubble to deflate. His bearish position has reignited debates about whether AI valuations have become dangerously inflated, challenging the widespread market optimism surrounding artificial intelligence technologies.
Accounting Practices and Market Warnings
Burry has raised serious concerns about how major technology companies are accounting for their AI infrastructure investments. He contends that companies including Microsoft, Google, Oracle and Meta are extending depreciation schedules while making substantial investments in Nvidia chips and servers.
According to Burry's calculations, this accounting approach could understate depreciation by approximately $176 billion between 2026 and 2028, artificially boosting sector profits. This warning comes as JP Morgan Asset Management's September report revealed that AI-related stocks have generated 75% of the S&P 500 index's returns since ChatGPT's launch in November 2022.
The investor, whose role was portrayed by Christian Bale in the 2015 film "The Big Short," is once again positioning himself against market consensus, warning that the AI rally may be approaching its peak. His latest moves continue his tradition of challenging popular market narratives, much like his famous bet against the housing market before the 2008 crisis.
