Michael Burry is winding down his hedge fund, Scion Asset Management. In a letter dated October 27 that was obtained and reported by Reuters, Burry informed investors that the fund will be liquidated, with most capital returned by year’s end, apart from a minor holdback for audit and tax purposes.
As reflected in the Securities and Exchange Commission’s records, Scion’s registration status switched to “terminated” on November 10, effectively relieving the fund from ongoing reporting obligations to federal or state regulators.
Scion Asset Management, which oversaw $155 million as of March, has drawn considerable scrutiny over the years as market watchers sought clues in Burry’s positions for indications of overvalued sectors and emerging market risks.
He hinted for his new chapter in his X post saying “On to much better things Nov 25th.”
Recently, Burry intensified his criticism of prominent technology companies, singling out names such as Nvidia and Palantir Technologies. The investor has raised doubts regarding the current boom in cloud infrastructure, accusing leading firms of overstating profits through aggressive accounting practices tied to their substantial hardware expenditures.
In a statement posted Monday on X, Burry, founder of Scion Asset Management, alleged that major providers of cloud and AI infrastructure—known as “hyperscalers”—are underestimating depreciation expenses by suggesting their chips have longer lifespans than they do in reality. According to Burry, this tactic can offer an artificial boost to corporate earnings, describing it as “one of the more common frauds of the modern era.”
He emphasized that when firms ramp up capital expenditure with purchases of Nvidia chips and servers, which typically follow a 2-3 year product cycle, this should not lead to extending the useful lives of computing equipment. Yet, according to Burry, all of the hyperscalers have followed this approach.
Burry projected that between 2026 and 2028, this accounting strategy would result in an understatement of roughly $176 billion in depreciation, thus inflating earnings across the industry. He singled out Oracle and Meta Platforms, estimating, based on his analysis, that their reported profits could be exaggerated by approximately 27% and 21%, respectively, by 2028.
On Monday, Scion Asset Management revealed it had taken put option positions—wagers that share prices will decline—in two prominent AI-driven firms, Nvidia (NVDA) and Palantir (PLTR). According to filings with the Securities and Exchange Commission, Scion acquired about $187.6 million in puts against Nvidia and $912 million in puts against Palantir.
A legendary figure in financial circles, Michael Burry is widely recognized for having accurately predicted the 2008 U.S. housing market crash. His story was featured in Michael Lewis’s best-selling 2010 book “The Big Short: Inside the Doomsday Machine” and depicted on screen by Christian Bale in the 2015 film adaptation.
