Michael Burry Shuts Down Scion Asset Management as AI Market Euphoria Peaks

Michael Burry — the contrarian investor made famous by “The Big Short” — is closing Scion Asset Management, marking a dramatic retreat from public markets at a time when valuations in major U.S. technology companies have surged to historic extremes.

In a letter to investors dated Oct. 27, seen by Reuters, Burry said he would liquidate the fund and return capital “but for a small audit/tax holdback” by year-end. The U.S. Securities and Exchange Commission database later showed Scion’s registration as terminated — confirming the fund no longer intends to file regulatory reports or operate as a traditional investment adviser.

Burry’s exit comes after months of increasingly outspoken warnings about what he sees as a distorted market shaped by excessive enthusiasm for artificial intelligence and accounting choices that mask the true costs of the ongoing cloud and data-center investment boom. Scion managed roughly $155 million in assets as of March, and its quarterly disclosures were routinely scrutinized by investors searching for signs of future volatility — a legacy of Burry’s prescient short bet against the U.S. housing market before the 2008 crash.

In a post on X this week, Burry wrote simply: “On to much better things Nov 25th,” offering no further explanation. He also disclosed buying roughly $9.2 million worth of put options on Palantir, giving him the right to sell shares at $50 each in 2027. With Palantir trading above $178, the bearish position is effectively a long-dated bet that the company — one of the market’s most aggressively valued AI firms — will face a sharp correction.

Burry has also publicly criticized Nvidia and other large technology companies, arguing that major cloud providers are smoothing earnings by extending depreciation schedules on their massive chip and server purchases. He has estimated that between 2026 and 2028, such adjustments could understate depreciation by as much as $176 billion across the sector, inflating reported profits as AI-driven capital expenditure accelerates.

This tension reflects a broader debate in U.S. markets: how much of the AI boom is truly transformational versus how much is fueled by momentum, concentration risk, and unusually optimistic assumptions. JPMorgan Asset Management noted in September that AI-related stocks have accounted for roughly 75% of the S&P 500’s returns since OpenAI launched ChatGPT in late 2022. That level of dependence on a narrow group of mega-cap firms has stirred unease even among bullish investors.

Some analysts say Burry’s retreat from the hedge-fund arena signals a deeper frustration with market structure itself. “Burry’s decision feels less like calling it quits and more like stepping away from a game he believes is fundamentally rigged,” said Bruno Schneller of Erlen Capital Management. The move resembles a pattern playing out across the short-selling world: several prominent bearish shops have closed or restructured after years of battling speculative bubbles and facing legal or reputational blowback.

Earlier this year, Hindenburg Research shut down after a series of controversial campaigns against firms including India’s Adani Group and U.S. electric-truck maker Nikola. Jim Chanos — whose short thesis on Enron cemented his reputation — has clashed with Michael Saylor’s bitcoin-heavy company MicroStrategy, defending his view that the firm’s valuation is detached from fundamentals.

Scion’s own portfolio shifted dramatically in recent years. After holding positions in companies including American Coastal Insurance, Bruker, Canada Goose, VF Corp., Molina Healthcare and others, Burry exited those stakes in late 2024 and 2025. By mid-2025, Scion had shifted toward a more global approach, briefly turning positive on select international equities after previously betting against Chinese companies as the Trump administration pursued new tariffs.

But Burry has repeatedly hinted he no longer believes public markets reward true value discovery — echoing themes central to his “Cassandra Unchained” profile on X. Many expect he will move to a family-office structure, investing only his personal capital while remaining largely outside public view.

His departure marks the end of Scion Asset Management’s twelve-year run, and comes at a moment when the U.S. equity market is dominated by a handful of companies driving disproportionate returns. Whether Burry’s exit proves another well-timed warning shot — or simply a personal decision to step aside — will likely become clear only in hindsight.