Michael Burry Shuts Down Scion Asset Management Amid AI Sector Contrarian Positions

This analysis is based on multiple reports regarding Michael Burry’s closure of Scion Asset Management, with the primary event being the SEC deregistration on November 10, 2025, following an October 27, 2025 investor letter [1][2]. The closure marks the second time Burry has voluntarily shut down a fund while maintaining deep contrarian positions, mirroring his 2008 strategy after successfully shorting the housing market [2].

Burry’s Q3 2025 13F filing revealed an extremely concentrated bearish stance against the AI ecosystem. Palantir put options represented 66.04% of the portfolio ($912 million notional value), while Nvidia puts constituted 13.51% ($187 million notional value) [3]. This represented nearly 80% of Scion’s portfolio in bearish AI positions [3]. Contrarian bullish positions were maintained in traditional sectors, including Pfizer ($152.9 million) and Halliburton ($61.5 million) [3], suggesting a defensive rotation strategy.

Bury’s thesis centers on accusations that major tech companies are systematically understating depreciation by $176 billion from 2026-2028 [4]. He specifically alleged that Oracle would overstate profits by 27% and Meta by 21% by 2028 through using 5-6 year depreciation cycles for AI chips with actual 2-3 year lifespans [4]. The market reaction was significant - Nvidia dropped 7% before rebounding nearly 6%, while Palantir fell 11% before popping almost 9% [4]. Palantir CEO Alex Karp publicly criticized Burry’s positions as “super weird” and “bats— crazy” [4].

The SEC deregistration eliminates public 13F filing requirements, potentially converting Scion to family office operations with reduced disclosure [1][2]. Burry teased “much better things” coming November 25, 2025 via social media [1], creating anticipation about his next moves. The fund managed approximately $155 million in assets as of March 2025 [1] and operated for six years since reopening in 2019 [2].

Burry’s current actions closely parallel his 2008 strategy of closing a fund after taking major contrarian positions during what he identifies as market bubbles [2][4]. This pattern suggests Burry believes his bearish AI thesis will eventually be validated, but he’s unwilling to continue managing external capital during potential extended underperformance periods.

The closure highlights growing concerns about AI sector sustainability and return on investment. Burry’s accounting allegations, if validated, could represent systematic overvaluation across the entire AI infrastructure ecosystem, from chip manufacturers to software providers [4].

The transition from public hedge fund to potentially private family office operations significantly reduces market transparency into Burry’s investment thesis evolution [1]. This limits the investment community’s ability to track his positions and insights, which have historically served as contrarian indicators.

• The authenticity of the October 27 investor letter could not be independently verified by several outlets [5]
• Current status and unwinding of the massive put option positions remain undisclosed [4]
• Potential regulatory scrutiny of tech company accounting practices could emerge from Burry’s allegations [4]
• Market volatility in AI-related stocks may continue as investors digest Burry’s thesis

• Traditional sector positions (Pfizer, Halliburton) may benefit from defensive rotation [3]
• November 25th announcement could reveal new investment strategies or fund structures [1]
• Market dislocation in AI stocks may create entry opportunities for contrarian investors
• Family office structure could enable more flexible, long-term investment horizons

• October 27, 2025: Investor letter announcing liquidation [2]
• November 10, 2025: SEC registration terminated [1]
• November 13, 2025: Public disclosure of closure [1]

• Assets under management: ~$155 million (March 2025) [1]
• Bearish AI positions: ~80% of Q3 2025 portfolio [3]
• Top positions: Palantir puts ($912M), Nvidia puts ($187M) [3]

• AI sector experiencing unprecedented capital inflows and valuation expansion
• Major tech companies announcing massive AI infrastructure investments
• Ongoing debate about AI ROI and sustainability [4]

• Successfully predicted 2008 housing crisis
• Known for early bubble identification and contrarian positioning
• Maintains high-profile presence through social media commentary [1][2]