Michael Burry Increases AI Bets With Put Options

Investor Michael Burry has accelerated the timeline for his bearish outlook on the artificial intelligence sector, indicating the AI bubble may burst sooner than he previously anticipated. To increase leverage over a shorter time horizon, Burry shifted from standard short positions to put options on several key AI-related assets, including Palantir, Nebius, Micron, and the iShares Semiconductor ETF (SOXX).

Burry's new positions suggest a potential market flip by next summer, with some options expiring as late as September 2027. He based this strategic shift on research from Ares Management regarding the instability of unproven AI revenues and market signals from the semiconductor industry.

Contributing to this outlook, Acer CEO Jason Chen warned that increasing Chinese production capacity would return cyclicality to the memory chip sector and end current shortages. Burry's move reflects a belief that better timelines make leverage more palatable as he moves his expectations for a market correction forward.