Remember Michael Burry? The guy who made bank predicting the 2008 housing crash and got Christian Bale to play him in a movie? Well, he’s back with another bold prediction, and this time he’s betting against the AI gold rush – specifically Nvidia and Palantir.
Through his hedge fund, Burry dropped over $1 billion (in notional value) on put options against these AI darlings. That’s Wall Street speak for “I think these stocks are going to tank.” And honestly? Nvidia’s stock has been stuck in neutral since August, so maybe the guy’s onto something.
But here’s where it gets spicy.
Plot Twist: China Wants Chips (The Computer Kind)
A Reuters report just dropped some serious tea: Chinese customers apparently want to buy over 2 million of Nvidia’s H200 chips. That’s a problem because Nvidia only has about 700,000 sitting around. It’s like trying to fulfill 2 million iPhone orders when you’ve only got 700,000 in the warehouse.
The H200 isn’t just any chip – it’s Nvidia’s second-most powerful AI processor, built on their fancy “Hopper architecture.” Think of it as the difference between a Tesla Model S and a Honda Civic. Both get you places, but one does it with a lot more style (and processing power).
Here’s the kicker: Trump apparently gave the green light for these chip sales to China, reversing previous export restrictions. So now Nvidia is scrambling to get Taiwan Semiconductor (their chip manufacturer) to crank out more H200s, with production expected to start in Q2 2026.
The $27,000 Question
Nvidia’s pricing these China-specific chips at about $27,000 each. That might sound insane until you realize that’s actually a bargain compared to what people were paying on the gray market. It’s like getting a Rolex at retail price instead of paying scalper rates.
Chinese tech companies see the H200 as a massive upgrade over the watered-down H20 chips they’ve been stuck with (thanks to previous trade restrictions). The H20 was basically the “diet version” of Nvidia’s chips – same brand, less kick.
The Bottom Line
If this China deal goes through, Nvidia could be looking at billions in new revenue. That’s the kind of news that makes stocks go “brrr” and leaves short sellers crying into their portfolios.
Of course, there’s still risk here. Beijing hasn’t officially signed off on these imports yet, and we all know how quickly trade policies can change. But if Nvidia pulls this off, Burry and his fellow bears might be in for some serious pain.
The irony? The guy who made his fortune betting against an overheated market might be about to get schooled by the very AI boom he’s betting against. Sometimes the house wins, even when you think you’ve figured out the game.
Will Burry’s crystal ball crack this time? We’ll find out soon enough. But one thing’s for sure – this AI chip war is far from over.