"Michael Burry's critique suggests that major AI players are manipulating profit figures by extending the depreciation schedules of GPUs and servers, which he believes misrepresents their actual economic performance."
"Burry estimates that this accounting maneuver has understated expenses by up to $176 billion between 2026 and 2028, artificially inflating sector earnings by approximately 20%."
"Nvidia's CEO Jensen Huang and CoreWeave's CEO Michael Intrator have defended their positions, arguing that the narrative of 18-month obsolescence does not reflect the reality of customer contracts and GPU value retention."
"Burry's short positions in Nvidia and Palantir have led to significant stock declines, with Nvidia down 14% and Palantir down 24%, amidst growing concerns about the sustainability of AI capital expenditures."
Michael Burry argues that major AI companies are artificially inflating profits by extending depreciation schedules for GPUs and servers beyond their actual lifespan. He estimates this accounting practice has understated expenses by $176 billion from 2026 to 2028, leading to a 20% boost in sector earnings. Nvidia and CoreWeave executives defend their depreciation timelines, asserting that older GPUs retain significant value. Burry's short positions in Nvidia and Palantir have seen market reactions, with both companies experiencing notable stock declines amid broader concerns about AI capital expenditure sustainability.
Read at 24/7 Wall St.
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