Tokenization and AI: Burry's Divergent Paths in Reshaping Finance

Michael Burry, the investor who famously predicted the 2008 housing crisis, has once again positioned himself at the intersection of financial innovation and skepticism. In 2025, his focus has split into two distinct trajectories: a bearish critique of AI-driven markets and a cautious exploration of tokenization's potential to reshape global finance. These divergent paths highlight Burry's contrarian instincts and his ability to identify systemic risks while seeking asymmetric opportunities in emerging asset classes.

The AI Bubble: A Bearish Bet Against Hyperscale Optimism

Burry's skepticism toward AI has crystallized into a $1 billion short position against the sector, primarily targeting firms like Nvidia and Palantir Technologies. According to a report by , his Q3 2025 13F filing revealed that these two holdings accounted for nearly 80% of his portfolio, reflecting a concentrated bet against what he views as an overinflated market. His thesis centers on the artificial inflation of earnings by hyperscalers, which he argues stems from extended depreciation schedules for AI hardware and aggressive stock-based compensation (SBC) practices.

Burry estimates that AI infrastructure depreciation is understated by approximately $176 billion between 2026 and 2028, a discrepancy he attributes to the rapid obsolescence of AI hardware. He further contends that companies like Nvidia have underreported SBC dilution by as much as $92 billion since 2018, significantly reducing their reported earnings. These critiques echo his historical comparisons of speculative tech booms, with Burry drawing direct parallels between the current AI frenzy and the dot-com bubble of the 1990s.

His bearish stance has already triggered market reactions: Palantir and Nvidia experienced short-term price dips following the disclosure of his bets. Burry's broader argument is that AI spending is driven by fear of obsolescence rather than sound economic reasoning, creating a fragile foundation for long-term growth.

Tokenization: A Contrarian Path to Financial Resilience

While Burry remains critical of AI, he has shown openness to tokenization as a tool for financial innovation. In December 2025, he shared an article on X discussing tokenization's role in strengthening the U.S. dollar and enabling real-time asset movement. Though he has not disclosed direct investments in blockchain-enabled assets, his public statements suggest a recognition of tokenization's potential to democratize access to real-world assets and enhance liquidity.

Burry's shift toward alternative asset classes is further underscored by his decision to close Scion Asset Management and adopt a family office model. This move aligns with principles central to crypto investing, such as self-custody and long-term conviction, even if his direct crypto exposure remains undisclosed. Analysts speculate that his pivot could signal a broader interest in blockchain-based assets, though no specific projects have been named.

Contrarian Opportunities in a Divergent Landscape

Burry's dual focus on AI skepticism and tokenization exploration highlights a strategic duality: shorting speculative tech overvaluations while positioning for the next wave of financial infrastructure. His long-term investments in defensives like Pfizer and Halliburton further reinforce his expectation of a market correction and a rotation into energy and industrial assets. According to a report by , this approach mirrors his 2008 strategy, where he identified mispriced risks in the housing market while building a portfolio insulated from broader downturns.

For investors, Burry's divergent paths offer a blueprint for navigating today's volatile markets. Shorting AI-driven firms with weak monetization fundamentals, while exploring tokenization's potential to tokenize real-world assets (such as real estate or commodities), could yield asymmetric returns. However, the lack of transparency around Burry's tokenization investments means the sector remains unproven at scale.

Conclusion

Michael Burry's 2025 strategies underscore his role as a contrarian sentinel in finance. By betting against AI's speculative excesses and cautiously embracing tokenization's transformative potential, he navigates a landscape defined by both risk and opportunity. For investors, the lesson is clear: skepticism toward overhyped sectors and a willingness to explore nascent technologies can uncover asymmetric rewards-even as the markets grapple with their own contradictions.