This week, Michael Burry announced he’s shutting down Scion Asset Management and returning capital, saying his view of value “has not been in sync with the markets for some time.” This isn’t a tweak in strategy — it’s an exit from a market he no longer recognizes, after spending two years being early and ignored. Remember: he tweeted “SELL” in January 2023, and QQQ has nearly doubled since then on the back of AI megacaps and nonstop liquidity.
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He didn’t leave quietly. In recent months Burry loaded up on puts tied to Palantir and Nvidia, accused the big cloud players of stretching asset lives to flatter earnings, and warned that AI infrastructure profits were being smoothed while capex exploded. Now, just as he steps away, the exact complex he targeted is finally cracking: AI leaders have rolled over, and Oracle is down more than 35% as debt, funding needs, and data-center promises collide with cash-flow reality.
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The bigger story is what his exit represents. Traditional value investors are running straight into the largest AI spending cycle in history — one built on trillion-dollar buildouts, thin economics, circular vendor financing, and rising dependence on debt over cash. Burry walking off the field is less a personal drama and more a signal of how hard it’s become to apply old-school valuation in a market that’s priced around events and AI narratives first and fundamentals second.

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Cracks in the AI Trade — Exactly Where Burry Pointed

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The stocks Burry targeted are now breaking down — and the shift reflects something broader: the market had been pricing in AI growth far too quickly, and it’s now getting a reality check. Oracle’s own cloud-infrastructure forecasts — shown in the chart above — illustrate just how aggressive some of these AI-buildout expectations had become.