Quick overview

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Michael Burry, who has gained notoriety recently for criticizing the artificial intelligence boom, is placing a wager against Oracle. Burry stated in a Substack post following Friday’s market close that he owns put options on Oracle shares.

Puts usually gain value when the underlying asset’s price declines. Burry, who disclosed negative wagers against Nvidia Corp., a manufacturer of AI chips. and Palantir in November, as well as directly shorted Oracle over the previous six months, he claimed.

Oracle is well-known for its database software, but it has recently made a strong push into cloud computing services, necessitating an expensive expansion of data center capacity, for which it is incurring large debt. “I disagree with its positioning and the investments it is making.

It did not have to do what it is doing, and I have no idea why. In response to a reader who questioned why he had chosen to wager against Nvidia rather than Oracle, Burry wrote, “Maybe ego.”

His statement that he would short OpenAI at a $500 billion valuation highlighted his general doubts about the speed and viability of the AI buildout.

NVIDIA, according to Burry, is the most focused way to convey a pessimistic outlook on the artificial intelligence market. He wrote, “Nvidia is also the most beloved and least doubted.” Therefore, shorting it is inexpensive, and its puts are less expensive than some of the other large shorts that are more dubious