Investment Philosophy Clash: Buffett and Burry's "Opposite" Choices on AI Issues

Why Do the Two Big Shots Take Completely Different Paths?

Warren Buffett and Michael Burry are two giants in the investment world, but when it comes to the AI wave, they are heading in entirely opposite directions.

Burry, famous for “The Big Short,” has recently been bearish on Nvidia and Palantir—this guy made a fortune betting against the housing market, and now he’s shorting AI chips and data companies. Meanwhile, Buffett’s Berkshire Hathaway has been aggressively buying Alphabet stock in Q3. One is bearish, the other bullish—whose vision is sharper?

Burry’s Logic: Overvaluation + “Accounting Tricks”

Burry’s reasons for being bearish are not unfounded. Through his 13F filings, he revealed that Scion Asset Management bought put options on Nvidia and Palantir in Q3.

Let’s look at Palantir’s valuation—its P/S ratio is as high as 110, which is astronomical even in the software industry. Some compare it to the “tech stocks” during the dot-com bubble, and everyone knows how those valuations ended up crashing.

Even more interesting is Burry’s skepticism about the accounting practices of big tech companies. Amazon, Microsoft, Alphabet, Meta—these Nvidia major clients—use very long depreciation periods for AI infrastructure. But Burry points out that the actual product lifecycle of Nvidia GPUs is only 18 to 24 months, and this discrepancy might conceal something. He even hints at possible systemic accounting issues.

Since Burry disclosed his short positions on November 3rd, Palantir has fallen 19%, Nvidia 13%. In the short term, this guy might have made quite a bit of quick money.

Buffett’s Choice: Sudden Move After Three Years of Silence

What has Buffett been doing these past three years? One word: waiting.

While others were celebrating the AI concept, he was hoarding cash and buying government bonds. He even sold off stocks, cutting big positions in Apple and Bank of America. Berkshire’s cash reserves hit a record high.

It wasn’t until Q3 that Buffett finally made a move—targeting Alphabet.

Among the “Big Seven,” Alphabet’s valuation is relatively moderate, with strong brand power, stable profits, and a diversified ecosystem—these are the surface reasons for Buffett’s buy. But the deeper motivation might be more interesting: over these three years, Buffett has been quietly observing which companies’ AI investments truly translate into new products, revenue, and actual profits.

Alphabet clearly passed the test—Google and YouTube have integrated AI features, cloud services are revived with AI, and they are no longer just playing a supporting role against Azure and AWS.

Short-term Gains ≠ Long-term Correctness

This is the key point. Burry might profit in the short term from his bearish bets, but Buffett never believes that “making money is the only right thing.”

One of Buffett’s most important investment principles is: long-term holding. He only bought Alphabet after three years of the AI wave, and the timing and logic behind this imply a judgment: AI is not a fleeting trend but a long-term force that will remain resilient across various economic cycles.

In contrast, Burry’s short-selling strategy resembles that of day traders—identifying overvaluation and accounting loopholes to make quick profits and then exiting. This approach works well for short-term trading but is not aligned with long-term investing logic.

Who Will Win in the End?

Buffett’s decision to invest in Alphabet during the AI hype, which definitely has bubbles, reflects his confidence in AI’s long-term value—especially its resilience through different economic cycles.

Burry’s shorting, while based on accounting logic, is more about catching price bubbles rather than denying AI’s future potential.

From a multi-decade perspective, Buffett’s patience and understanding of industry life cycles might once again prove his foresight—although both strategies can make money in the short term, the ultimate victory may belong to the one willing to wait.