‘Big Short’ Investor Michael Burry Bails on Chinese Retail, Stays Put on AI
Michael Burry, famous for his prediction of the 2008 housing market collapse, is making unexpected moves in 2025. After profiting $1 billion by shorting the housing market, he is now signaling potential trouble in China’s economy. Despite significant investments in Chinese stocks last year, Burry has begun selling off his largest positions while holding firm on others.
Key Points:
- Burry made a major bet on Chinese stocks last year, but he has recently reduced his exposure.
- He sold off large portions of his positions in Alibaba (BABA) and JD.com (JD) due to concerns about China’s economy and increasing geopolitical tensions.
- Burry continues to hold Baidu (BIDU), a leader in AI and self-driving cars, signaling confidence in the company’s long-term prospects.
Burry’s Shift Away from Chinese Retail Stocks
Burry’s hedge fund, Scion Asset Management, held significant positions in Alibaba and JD.com in 2024, with these stocks accounting for a large portion of his portfolio.
- Alibaba (BABA) was Burry’s largest holding but he sold 25% of his stake in Q4, reducing its weight in his portfolio from 25% to 16.4%.
- JD.com (JD), his second-largest holding, saw a 40% reduction in Q4, dropping from 24% to 13.4% of his portfolio. This move comes amid rising concerns about China’s slowing economy and increased regulatory scrutiny.
Geopolitical Concerns and U.S. Policy Impact
Burry’s decision to scale back his investments in these Chinese stocks coincides with heightened geopolitical tensions between the U.S. and China.
- President Trump’s policies include expanded limits on exporting U.S. technology to China, and new tariffs on energy and strategic industries.
- JD.com and other Chinese stocks have been negatively impacted by these developments, with JD’s stock falling more than 7% after these announcements.
Baidu: Burry’s Bet on AI
While Burry reduced his exposure to Alibaba and JD.com, he has kept his position in Baidu (BIDU) intact.
- Baidu is a leader in AI, self-driving cars, and cloud computing.
- Burry’s holding in Baidu represents 13.6% of his portfolio, making it his second-largest position after the sale of JD.com.
- Despite market fluctuations, BIDU stock is up 8% in 2025 and continues to perform relatively well compared to other Chinese stocks.
Baidu’s Expanding Footprint
Baidu is continuing to expand its business, with a significant move to acquire JOYY, a Chinese live-streaming service, for $2.1 billion.
- This acquisition positions Baidu to better compete with rivals like ByteDance, the owner of TikTok.
- The purchase also strengthens Baidu’s investments in AI and cloud computing, which Burry seems to view as key growth drivers for the company.
Michael Burry’s actions in 2025 reflect his cautious stance on China’s economy and retail sector, despite holding onto his belief in AI technology.
- Burry’s decisions to reduce his positions in Alibaba and JD.com suggest he is wary of geopolitical risks and slowing growth in China.
- However, his continued faith in Baidu shows his confidence in the company’s AI investments and its potential to outperform in the tech sector.
