I heard the news of Michel Burry returning money to the investors and essentially shutting down his fund. My first question was, why would he do this, does he not believe he can make money for his clients by shorting the ‘AI bubble’ as he and many other call it?
Michael Burry is an American investor and hedge fund manager best known for predicting and profiting from the 2008 subprime mortgage crisis, a story famously depicted in the book and film “The Big Short” where he was portrayed by Christian Bale.
Burry launched Scion Capital in 2000, quickly gaining a reputation through online forums and blogging, as well as notable returns compared to the broader market. In the mid-2000s, he analyzed the real estate and mortgage sectors, predicting an imminent collapse due to risky lending practices. He famously convinced major investment banks to sell him credit default swaps to bet against subprime mortgage bonds, eventually making over $700 million for his investors and $100 million personally.
Just recently, Michael Burry announced the liquidation of Scion Asset Management and the return of capital to investors by the end of 2025. He made this decision public in a letter dated October 27, 2025, and took the additional step of de-registering the fund with the SEC on November 10, 2025, ending its public fund management status.
The Reason Behind the Closure
Burry stated that his approach to valuing securities had not been aligned with market trends “for some time,” prompting him to make a disciplined withdrawal rather than risk further disconnect from prevailing market sentiment. He cited the surging valuations and perceived bubble in artificial intelligence (AI) stocks—especially his concentrated short bets against Palantir and NVIDIA—as factors influencing his decision to liquidate. Additionally, speculation has arisen that Burry’s contrarian, risk-heavy positions in AI may have led to losses, but most credible sources suggest this move was more tactical—possibly a strategic retreat from an overheated market rather than a forced exit from major losses.
I tend to think that he was unable to make any money by shorting the market, which is what he loves doing most. He, therefore, must think that this ‘AI bubble’ will continue much longer than he can stay solvent.
Impact and What’s Next
By closing Scion Asset Management and deregistering with the SEC, Burry effectively removed himself from the need to make regular disclosures, possibly indicating plans to transition to a family office or manage assets privately. He has also teased new strategic directions, with hints about a November 25 announcement, leaving open questions about his future focus, whether on private investments or another contrarian venture