Michael Burry, founder of Scion Asset Management, has increased his investment stake in the Chinese technology company Alibaba Group Holding Ltd. [1]

This move signals a strategic shift in how some high-profile investors view the global artificial intelligence race. By pivoting toward a Chinese giant, Burry is challenging the current market dominance and valuation of U.S.-based AI firms.

Burry said Alibaba is currently undervalued. He pointed to the company's specific AI strategy and its ongoing share-buyback program as primary drivers for the investment [1]. This optimism toward the Chinese firm contrasts with Burry's outlook on the American tech sector, where his fund has taken positions against companies such as Nvidia and Palantir [1].

The investor believes that many U.S. AI stocks have become overvalued. In a broader look at the sector, reports indicate that some AI valuations have reached extreme levels, with Anthropic's valuation cited as nearly $1 trillion [1].

Alibaba, which is listed on both the New York Stock Exchange and the Hong Kong Exchange, continues to integrate AI into its e-commerce and cloud ecosystems [1]. Burry's decision to increase his holding suggests a belief that the market has overcorrected on Chinese tech risks while ignoring the fundamental value of Alibaba's AI initiatives [1].

Scion Asset Management has a history of taking contrarian positions, a strategy that made Burry famous during the 2008 financial crisis. His current approach mirrors that pattern by betting against the prevailing enthusiasm for U.S. AI hardware and software providers while seeking value in the East [1].

“Burry said Alibaba is currently undervalued.”

Burry's investment suggests a divergence in the AI trade, where value is sought in established international platforms rather than high-growth U.S. equities. This shift highlights a growing skepticism regarding the sustainability of current U.S. tech valuations and a calculated bet that Chinese regulatory environments or market prices have created an entry point for undervalued AI assets.