Peter Thiel Michael Burry SoftBank Exit Nvidia Stakes Amid AI Bubble Concerns in 2025: Peter Thiel, Michael Burry and Softbank bet big against AI — is the bubble finally about to burst?
Peter Thiel completely exited his Nvidia position by selling approximately 537,742 shares in the third quarter of 2025. This stake accounted for almost 40% of the investment fund. Thiel’s macro fund has drastically reduced its exposure to U.S. stocks, reducing its holdings from about $212 million to $74 million. Its portfolio now focuses mostly on Tesla, Microsoft and Apple.
SoftBank, once Nvidia’s largest shareholder, sold all 32.1 million shares worth $5.8 billion in October 2025. The move comes as SoftBank directs capital into new AI startups like OpenAI and its planned trillion-dollar AI manufacturing hub.
Earlier, Michael Burry also reduced his exposure to Nvidia and AI-related stocks, citing stretched valuations and speculative risks.
The exits of these giant investors led to sharp declines in Nvidia’s share prices and the broader technology sector. NVIDIA shares fell after SoftBank’s sale, and SoftBank’s own shares fell 15% in just three days.
Experts see these moves as a data-backed warning signal about AI valuations. Nvidia’s meteoric rise to a trillion-dollar-plus valuation reflected sky-high expectations fueled by explosive demand for AI chips and data center growth. Yet such valuations appear increasingly disconnected from traditional financial fundamentals. SoftBank is not abandoning artificial intelligence when exiting Nvidia, but is reinvesting in new projects with broad artificial intelligence infrastructure potential. Peter Thiel’s shift of his portfolio to Tesla, Microsoft, and Apple suggests a measured emphasis on more diversified, solid technology companies amid current market volatility. The mass retreat of these high-profile investors raises a critical question: Is the AI-driven stock rally approaching a bubble burst? Although fundamentals remain strong for leading AI firms, this concentration of exits is fueling discussions about overheated valuations and a possible market cooling.
For investors and market observers, this data provides an important signal to re-evaluate AI stock risks, valuation levels and portfolio balance in light of recent market dynamics and insider movements.
A theme in all three moves is impossible to ignore: valuation stress. The AI industry has seen historic inflows, historic optimism, and historic price increases. However, increased demand does not always mean sustainable profit growth. Early adopters burn money before they make it. Data centers cost billions. Electricity demand is booming. As competition increases, margins shrink. If earnings fail to meet expectations, the correction can be sharp, swift and painful.
Why are top investors suddenly withdrawing money from AI?
Some of the biggest names in global finance are stepping back from artificial intelligence; Not because they don’t believe in technology, but because they are worried about it. Valuations far ahead of reality. These moves are not small measures. These are full-scale exits and billion-dollar bets against the industry.
Michael Burry, famous for predicting the crash in 2008 wide range of selling options Against large companies exposed to AI. He is effectively betting that his current financial projections are inflated and that future earnings will not justify today’s sky-high prices. This is no small claim; A direct challenge to the foundations of the AI boom.
Peter Thiel, another heavyweight known for early investments in game-changing technology, liquidated his entire position in a leading artificial intelligence chip maker. For a long time this stock made up a large portion of his portfolio. A complete exit signals real concern about the sustainability of current valuations.
SoftBank has also abandoned large AI chips, opting instead to direct capital into a broader AI ecosystem. It’s not just about making a profit. This is a signal that the company sees structural risk There are opportunities in one corner of the AI market and in the other.
Together, these movements paint a clear picture: The smartest money in the room thinks the AI story has entered a risky phase.
Michael Burry warns AI profits are overrated
One of the biggest concerns Burry raises is that companies powering the AI boom They exaggerate their profitability by using accounting options that make short-term earnings look better. He believes the lifespan of AI hardware, especially costly data center equipment, has been greatly extended.
When companies extend depreciation schedules, their official earnings increase even if their cash flows don’t actually improve. By Burry’s logic, this could mean that investors value AI companies. inflated, non-permanent profitability.
If he’s right, much of the sector’s earnings could eventually be revised downwards. This will force a painful correction, not because AI demand has collapsed, but because the math supporting current stock prices has become impossible to defend.
Burry isn’t saying AI is fake. he says Expectations built around this may not be realistic. And historically bubbles don’t burst because the technology isn’t real; They explode when prices are disconnected from what companies can actually earn.
That’s why their warnings are taken seriously. This isn’t about the hype. It’s about numbers.
Why did Peter Thiel walk away from one of the strongest AI winners?
Thiel’s debut is especially important because he understands technology cycles better than almost anyone else. It has a long history of spotting early trends and stepping aside when valuations no longer make sense. If it sells out completely that usually means it has seen either a top or a reversal.
Thiel implied that the market behaved as follows: The final stages of the classic bubbleWhere investors stop evaluating fundamentals and start pouring money into an industry just because prices keep rising. This kind of momentum cycle can last a long time until something breaks.
His concern is simple: The demand for AI is real, but not every company can turn it into long-term profit. And the few that do may take years to justify their current prices.
His complete exit indicates that he believes the risk is now higher than the reward. When someone with Thiel’s background pushes back so aggressively, many investors wonder if he’s seeing something others are ignoring.
This does not mean that artificial intelligence will disappear. This means: stock market version Artificial intelligence may be entering a dangerous phase.
Is SoftBank exiting AI or shifting to a new strategy?
SoftBank’s decision to sell its massive AI chip assets has sparked intense controversy, but the move is more nuanced than a simple “exit.” SoftBank isn’t abandoning AI — if anything We’re focusing on a broader, more physical AI future: robotics, autonomous systems and infrastructure.
But the timing raises important questions. Why sell now? Why would you take profit at this exact moment? Why redistribute capital instead of holding it?
SoftBank seems to believe AI will grow even as AI grows The next wave of winners won’t look exactly like current leaders. They are investing large amounts of capital in AI platforms, data center projects, and intelligence infrastructure—areas that could potentially yield longer-term payoffs.
This may signal that the firm is considering: Chip-focused rally is overheatingand the most explosive gains may already be behind it. They want to be early Next a major phase of artificial intelligence rather than the endpoint of the current one.
In short, they do not give up on artificial intelligence. They are repositioning for what they believe is coming next.
So is the AI bubble really about to burst?
Some sort of correction now looks increasingly likely. Too many signals are converging: overstretched valuations, accounting warning signs, massive insider exits, and shifting capital strategies. This doesn’t mean that AI is a fad; The market built around AI may be pricing in more than reality can deliver in the short term.
But a complete collapse? This is much less certain. Unlike the dot-com bubble, there is real adoption of AI, real infrastructure, and real use cases across industries. Companies spend billions of dollars on hardware, models and distribution, not on ideas.
The most realistic outcome is not a dramatic accident, repricing. A refreshment. A shakeup in which strong companies survive and weak players are punished.
The bubble may not burst but the air is definitely starting to leak out.
