Renowned investor Michael Burry, who gained fame for foreseeing the 2008 financial crisis and inspiring the film “The Big Short,” might be on the verge of another notable prediction coming true.

On Tuesday, Burry placed a substantial bet exceeding $1 billion against Wall Street’s AI surge, anticipating that this boom could unravel disastrously.

Recent developments have started to vindicate Burry’s skepticism. U.S. tech stocks are experiencing their steepest decline since the market turbulence caused by former President Donald Trump’s tariffs in April.

Eight leading AI-focused companies, including Nvidia, Meta, Palantir, and Oracle, have collectively shed an astonishing $1.1 trillion in market value since last week.

By midday in New York, the S&P 500 had dropped by 1.2%, the Nasdaq by 2%, and the Dow Jones by 300 points, or 0.7%. The Nasdaq is facing a potential 4% weekly loss, marking its most significant downturn since the tariff disputes of the Trump era.

Burry’s bets particularly targeted Nvidia and Palantir, two standout names in the AI sector, which have suffered the most substantial losses amid the broader market slump.

Shares of Nvidia — the world’s most valuable company — tumbled another 4 percent Friday, leaving them down 13 percent for the week. Palantir has plunged 17 percent since Monday,

Filings show Burry’s hedge fund, Scion Asset Management, disclosed put options worth about $900 million against Palantir and $187 million against Nvidia. A put option is a financial bet that pays off if a company’s share price falls. 

Michael Burry, founder of Scion Capital and the real-life investor behind The Big Short, has made a fresh billion-dollar bet against the AI boom. Here he poses for a portrait in Cupertino, California, in September 2010

Nvidia shares plunged 13 percent this week, wiping hundreds of billions from its market value as fears grow the AI boom is losing steam

CEO Jensen Huang made things worse by admitting that ‘China is going to win the AI race.’ He later tried to walk back the remark, but investors were already spooked.

Meanwhile, concerns are mounting over OpenAI’s finances. CFO Sarah Friar this week floated the idea of a government ‘backstop’ to fund the company’s $1.4 trillion infrastructure commitments, while CEO Sam Altman rushed to calm markets, insisting OpenAI ‘does not want government guarantees.’

The turbulence has stoked fears of a broader tech correction — and Burry’s bearish bet is suddenly looking spot on.

Despite the carnage in tech stocks, some investors are clinging to hopes that the year could still end on a high.

Markets are watching closely for an end to the prolonged government shutdown in Washington and a possible December interest rate cut from the Federal Reserve — two moves that could help ease pressure on Wall Street. 

Analysts also point to the Supreme Court’s growing skepticism over Trump’s sweeping tariff plan and the next round of corporate earnings as potential turning points.

‘There’s still hope for a year-end rally once the shutdown ends and the tariff situation is resolved,’ said Louis Navellier, founder of Navellier and Associates. 

‘If Nvidia posts strong earnings later this month and the Fed cuts rates in December, we could still go out on a high. Corrections like this are normal, not something to panic over.’

Palantir stock tumbled 17 percent since Monday, its steepest drop in months, as investors abandon once-high-flying AI names

The tech-heavy Nasdaq Composite is heading for a 3.6 percent weekly loss — its worst performance since Donald Trump’s tariff-driven sell-off

Margot Robbie in The Big Short, where she famously explained complex financial jargon from a bubble bath — a scene that turned the 2015 film into a pop-culture hit

Christian Bale as Michael Burry in The Big Short — the role that won him an Oscar nomination and made Burry a household name

But beneath the optimism, warning signs are flashing across the economy. A new University of Michigan survey on Friday showed consumer sentiment nearing record lows, suggesting Americans are losing confidence fast. 

And just a day earlier, outplacement firm Challenger, Gray and Christmas revealed that layoffs in October hit their highest level for that month in 22 years — underscoring fears that the job market may finally be cracking.

The company, which tracks workforce cuts, said AI adoption and corporate cost-cutting are driving the losses.

‘Some industries are correcting after the hiring boom of the pandemic,’ said Andy Challenger, the firm’s chief revenue officer. ‘Those laid off now are finding it harder to quickly secure new roles.’

The contrast is stark: Silicon Valley is pouring trillions into data centers and chips — even as ordinary Americans like 42-year-old HR specialist Chelsea Walker, who was laid off from TikTok last year, struggle to find work.

‘My home is at stake right now and my prospects are extremely thin,’ Walker told the Daily Mail. ‘I worry day and night about what I’m getting ready to lose.’

With Wall Street’s high-flying tech names suddenly grounded and layoffs surging, Burry’s warning of an ‘AI-fueled meltdown’ may be coming true sooner than anyone expected.