You know Michael Burry?
The guy who bet against the housing market in 2008 and made a fortune when everything collapsed?
You may remember him from “The Big Short”. Christian Bale played him.
Well, Burry is back with another contrarian bet, and this time his target is Oracle.
Last Friday, Burry disclosed on his Substack newsletter that he owns put options on Oracle and has been directly shorting the stock for the past six months. For those unfamiliar, put options are essentially bets that a stock will fall. The lower it goes, the more money you make.
So what’s Burry’s problem with Oracle?
The ego-driven pivot
Oracle used to be a database software company. Boring, stable, profitable. But recently, founder Larry Ellison decided Oracle needed to become a cloud computing infrastructure provider to capitalise on the AI boom. This means building massive data centers, buying expensive Nvidia chips, and competing head-to-head with Amazon Web Services and Microsoft Azure.
Burry thinks this is a terrible idea. In his words: “I do not like how it is positioned or the investments it is making. It did not need to do what it is doing, and I do not know why it is doing this. Maybe ego.”
That “maybe ego” is a direct shot at Ellison, suggesting the 80-year-old billionaire is making strategic decisions based on pride rather than prudent business judgment.
The $95 billion problem
Here’s where things get scary. To fund this aggressive expansion, Oracle has taken on approximately $95 billion in debt—making it the largest corporate borrower outside the financial sector. That’s more debt than most countries carry.
Why is this dangerous? Because unlike real estate or other tangible assets, the AI infrastructure Oracle is building could become obsolete quickly.
Those expensive Nvidia chips? They might be worthless in two years when the next generation comes out.
Data centers? They depreciate fast.
If the AI boom slows down or demand doesn’t materialize as expected, Oracle will be stuck with depreciating assets and crushing debt payments.
The tale of two strategies
What makes Burry’s Oracle short particularly interesting is what he’s not shorting. He’s explicitly avoiding Meta, Alphabet (Google), and Microsoft, even though they’re all heavily invested in AI.
Why? Because these companies have fortress businesses to fall back on.
As Burry explains: “If I short Meta, I’m also shorting its social media and advertising dominance. If I short Alphabet, I’m shorting Google Search in all its forms, Android, Waymo, etc. If I short Microsoft, I’m shorting a global office productivity SaaS goliath.”
Oracle doesn’t have that luxury. Its legacy database business is steady but mature. By going all-in on AI infrastructure, Oracle has essentially become a pure bet on one trend. If that trend reverses, there’s no safety net.
The stock market agrees (sort of)
Oracle’s stock performance suggests the market shares some of Burry’s concerns. In September 2025, the stock skyrocketed 36% in a single day after Oracle announced bullish AI cloud forecasts. Investors got euphoric.
But that euphoria didn’t last. As analysts dug into the details, rising capital expenditures, complex cloud deal structures, that mountain of debt, the gains evaporated. By year’s end, Oracle had given back almost all those gains, finishing about 40% below its September peak.
Burry’s track record
This isn’t Burry’s first rodeo with AI skepticism. In November, he revealed put options on both Nvidia and Palantir, two other AI high-flyers. Both stocks dropped on the news.
Burry has earned the right to be heard. His 2008 housing market bet wasn’t just lucky—it was based on deep analysis that contradicted what everyone else believed. He’s built a reputation for seeing bubbles before they pop.
After shutting down his hedge fund Scion Asset Management in late 2025, Burry now shares his market views through a paid Substack newsletter, which is where he dropped this Oracle revelation.
The bottom line
Michael Burry believes Oracle is making a strategic mistake driven by ego that could end badly for shareholders. The company has loaded up on debt to chase the AI infrastructure dream, but unlike its larger competitors, it lacks diversified revenue streams to cushion a potential fall.
Is he right? Oracle certainly faces significant risks. The $95 billion debt load is real. The competitive landscape against AWS and Azure is brutal. And the AI infrastructure buildout could indeed result in stranded assets if demand doesn’t meet expectations.
But Oracle supporters might argue that Ellison has defied doubters before, that the AI revolution is still in its early innings, and that Oracle’s database expertise gives it unique advantages in the cloud market.
Only time will tell if Burry’s latest big short pays off. Oracle shares slipped just 0.5% in premarket trading after his disclosure, suggesting the market isn’t panicking yet. But if history is any guide, betting against Michael Burry has rarely been a winning strategy.
Sonia Boolchandani is a seasoned financial writer She has written for prominent firms like Vested Finance, and Finology, where she has crafted content that simplifies complex financial concepts for diverse audiences.
Disclosure: The writer and her his dependents do not hold the stocks discussed in this article.
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