Michael Burry has placed a whopping £840 million ($1.1 billion), suggesting that the growing bubble around artificial intelligence will burst.
Documents revealed that Burry, a US investor and hedge fund manager who had predicted the major housing crisis, gambled against two companies involved in AI, prompting concern about the future of the industry.
Burry is best known for being one of the first investors to warn about the impending US subprime mortgage crisis, predicting that lenders issuing people with 'high-risk' mortgages would cause the housing market to crash.
His predictions would come true in 2007, with the fallout of the crisis causing the 2008 financial recession.
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Burry's predictions would also be featured in 2015's film The Big Short, which saw him portrayed by The Dark Knight actor Christian Bale.
Aside from making his name - and fortune - in predicting a major global recession, Burry has warned about Bitcoin and 'meme stocks', so it's understandable why an ominous prediction from Burry would cause people to worry.
What are the companies which Burry has gambled against?
Burry placed his bets against software company Palantir and chipmaker Nvidia, both of which are businesses that are heavily invested in developing artificial intelligence systems.
Nvidia has shifted its focus in recent years from creating computer graphics to producing AI hardware, while Palantir uses artificial intelligence in its data analysis.
At the time of writing, stock in both Palantir and Nvidia is down.
Why has Michael Burry bet against the companies?
While Burry has yet to address the move directly, he did provide a rather ominous warning about where he sees the future of AI going last month.
Taking to X, the 54-year-old shared an image of Bale playing him in The Big Short alongside the cryptic caption: "Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play."
"Michael Burry has a history of making large bearish bets when he perceives there to be a bubble, most notably prior to the housing market crash of 2008," James Kardatzke, co-founder of stock research platform Quiver Quantitative, told This Is Money.
"This new disclosure suggests that he now believes there is an AI bubble which is due to pop."
What has been the reaction to Burry's actions been?
Burry's move has since been blasted by Palantir CEO Alex Karp, who called the decision to bet against AI 'bats**t crazy'.
"The two companies he’s shorting are the ones making all the money, which is super weird," Karp told CNBC. "The idea that chips and ontology is what you want to short is bats**t crazy.
"He’s actually putting a short on AI … It was us and Nvidia.
LADbible Group has contacted Nvidia and Palantir for comment.
Topics: Artificial Intelligence, AI, Money
Brenna Cooper