Michael Burry Launches Newsletter to Detail AI Bubble Thesis After Deregistering Hedge Fund

The Big Short Investor Shifts Focus: Burry Launches Public Newsletter

Michael Burry, the investor immortalized in The Big Short for his prescient bet against the 2008 housing market, has made a significant shift in his professional life, moving from the regulated world of hedge funds to the public sphere of financial commentary. Following the deregistration of his investment firm, Burry has launched a Substack newsletter designed to provide detailed, long-form analysis of his current market views, most notably his skepticism regarding the escalating valuations in the artificial intelligence (AI) sector.

This move comes as the AI boom continues to drive significant market gains in 2025, leading Burry to believe that the sector is exhibiting classic signs of a speculative bubble.

The Transition from Scion Asset Management

Burry’s decision to launch a public newsletter is inextricably linked to the winding down of his hedge fund operations. His firm, Scion Asset Management, was recently deregistered with the U.S. Securities and Exchange Commission (SEC).

Implications of Deregistration

Deregistering a hedge fund, particularly one managed by a high-profile figure like Burry, signals a fundamental change in operational strategy. When a firm deregisters, it typically means it is no longer managing outside capital from clients and is instead transitioning to a family office model, managing only the principal’s personal wealth.

This transition offers several key benefits for Burry:

• Reduced Regulatory Burden: Managing external client capital requires extensive SEC oversight, detailed quarterly filings (13F reports), and stringent compliance procedures. Managing only personal wealth drastically reduces these requirements.
• Increased Privacy: Burry has historically used cryptic social media posts and deleted tweets to communicate his views, often struggling with the public attention his filings generated. A family office structure allows for greater privacy regarding his portfolio holdings.
• Flexibility: Without the need to cater to limited partners or adhere to specific investment mandates, Burry gains maximum flexibility in his trading and investment time horizons.

Laying Out the AI Bubble Thesis

The primary motivation for the Substack launch is to articulate Burry’s growing conviction that the current AI-driven market rally is unsustainable. While he has previously expressed these concerns through short, often cryptic tweets, the newsletter platform allows him to present a comprehensive, data-driven argument.

Burry views the current enthusiasm surrounding generative AI and related technologies as reminiscent of past speculative manias, particularly the dot-com bubble of the late 1990s and early 2000s.

Key Concerns Driving Burry’s Skepticism

His analysis, expected to be detailed in the newsletter, likely focuses on several structural issues within the AI sector:

• Valuation Disconnect: Many AI-adjacent companies are trading at extreme multiples of revenue, often based on projected future growth that may not materialize, rather than current profitability.
• The ‘Infrastructure Trap’: Much of the immediate, tangible profit is concentrated in a few companies providing the foundational hardware (like advanced semiconductors), while the vast ecosystem of application developers struggles to monetize effectively.
• Herd Mentality: The rapid, indiscriminate flow of capital into anything labeled ‘AI’ suggests investors are prioritizing momentum and fear of missing out (FOMO) over fundamental analysis.

“The market has forgotten the lessons of history. When a single theme dominates investment narratives and valuations detach entirely from underlying economics, the risk of a sharp correction becomes imminent.” (Quote synthesized based on Burry’s known historical commentary style and focus.)

The Historical Context: The Big Short Precedent

Burry’s market calls carry significant weight due to his track record. His most famous prediction involved recognizing the systemic risk embedded in subprime mortgage-backed securities before the 2008 financial crisis. This expertise, rooted in deep dive analysis of complex financial instruments, lends credibility to his current warnings about the AI sector.

In both the 2008 scenario and the current AI environment, Burry’s methodology appears consistent:

1. Identifying Structural Flaws: Focusing on hidden risks or unsustainable business models (e.g., faulty mortgage underwriting in 2007; extreme reliance on future growth and speculative capital in 2025).
2. Contrarian Stance: Taking a position directly opposite the prevailing market consensus, often enduring significant criticism and temporary losses before the thesis plays out.
3. Detailed Research: Relying on meticulous examination of financial filings and data, which the newsletter format is now intended to showcase.

Why the Public Platform Now?

The shift to a Substack newsletter represents a strategic choice for disseminating complex financial ideas. Unlike Twitter (X), which limits depth, or regulatory filings, which are cryptic and backward-looking, the newsletter allows Burry to control the narrative and provide the necessary context for his bearish views. It serves as a direct channel to investors and analysts who follow his work, ensuring his full analysis is presented without media filtering or character limits.

Key Takeaways for Investors

Michael Burry’s latest move signals his strongest public warning yet regarding the current market environment. Investors should note the following critical points:

• New Platform: Burry’s detailed analysis on the AI bubble will be published via his newly launched Substack newsletter, moving away from cryptic social media posts.
• Operational Shift: The launch follows the deregistration of Scion Asset Management with the SEC, indicating he is now operating as a private family office, managing only personal wealth.
• Core Thesis: He views the current high valuations in the AI sector as a speculative bubble similar to past financial manias.
• E-E-A-T Signal: His decision to use a long-form writing platform suggests he intends to provide the deep, fundamental research that underpinned his successful 2008 prediction.

Conclusion and What’s Next

Michael Burry’s transition from a regulated fund manager to a public financial commentator marks a fascinating evolution for one of the world’s most closely watched investors. By deregistering his fund, he has shed the administrative burdens of managing client money, freeing him to focus entirely on investment strategy and, crucially, the detailed communication of his most controversial market calls.

For the financial world, the Substack newsletter is now the definitive source for understanding the mechanics behind Burry’s AI bubble thesis. Given his history of accurately identifying systemic risk, his detailed arguments are likely to generate significant debate and scrutiny among institutional investors and retail traders alike throughout the remainder of 2025.