Burry Shuts Scion Capital

Michael Burry, famed for predicting the 2008 financial crisis, has closed his hedge fund, Scion Asset Management, amidst concerns over inflated valuations in tech and AI sectors. Scion Capital was officially listed as 'terminated' earlier this week. Burry, known for his contrarian investment strategies, had recently placed significant bets against companies like Palantir and Nvidia, anticipating a potential market correction.

Burry expressed his scepticism about the sustainability of high valuations, particularly in AI-related stocks, suggesting aggressive accounting practices might be masking the true costs of competing in the AI landscape. He highlighted the potential for understated depreciation across the sector. In a recent letter to investors, Burry stated his estimations of securities values are not in sync with the current market. Scion Asset Management, which had approximately $155 million in assets as of March 2025, will liquidate its funds and return capital to investors.

Burry's move comes as he anticipates disproportionate investment in AI infrastructure, masked by aggressive accounting, could understate depreciation by approximately $176 billion between 2026 and 2028. He had invested $9.2 million in put options on Palantir, allowing him to sell the stock at $50 apiece in 2027.