Michael Burry, the Wall Street investor who is known for predicting the 2008 housing crash has now intensified his criticism of Nvidia and other AI giants. Burry has accused them of overspending and misleading the investors. As reported by Business Insider, in his new post shared on Substak, Burry has described Nvidia\u2019s recent memo to analysts as \u201cone straw man after another\u201d and said it \u201calmost reads like a hoax.\u201d The title of the post shared by Burry reads, \u201cUnicorns and Cockroaches: Blessed Fraud.\u201d<\/p>\n
Burry\u2019s critique of Nvidia<\/p>\n
Burry has argued that Nvidia\u2019s rebuttal misinterpreted his concerns. Burry wrote that he never suggested that the company is dragging out depreciation of its property, plant and equipment. He noted that Nividia is mainly a chip designer with minimal capital expenditures. \u201cNo one cares about Nvidia\u2019s own depreciation. One straw man burnt,\u201d he wrote.Along with this, Burry also dismissed Nvidia\u2019s defense that older-generation chips remain in use, emphasising that his real concern is the risk of functional obsolescence for newer chips between 2026 and 2028. \u201cI am looking forward because I see problems that are relevant to investors today. A second straw man burnt,\u201d he added, calling Nvidia\u2019s response \u201cdisingenuous on the face, and disappointing.\u201dBurry has also revealed that he still hold put options against Nvidia and Palantir, signaling his bearish stance on two of the most prominent names in the AI boom. Nvidia and Palantir did not immediately respond to requests for comment.<\/p>\n
Nvidia Makes History: First Company to Hit $4 Trillion Market Cap<\/p>\n
The depreciation debate<\/p>\n
The focus point of Burry\u2019s critique is that how AI companies account for depreciation of their infrastructure. He also warned that giving useful life of chips and servers from three years to five or six years may inflate short-term profits but could lead to hefty write downs later.He cited Microsoft CEO Satya Nadella, who recently claimed that he slowed data centre expansion to avoid overbuilding for one generation of AI chips, given the rapid pace of technological change. \u201cThe hyperscalers have been systematically increasing the useful lives of chips and servers, for depreciation purposes, as they invest hundreds of billions of dollars in graphics chips with accelerating planned obsolescence,\u201d Burry wrote.Like the other leaders, Burry has also returned with the warning that investments in AI stocks will lead to the creation of na AI bubble. For Burry, the AI frenzy bears echoes of past market manias. \u201cI have been drawn into something much bigger than me,\u201d he wrote, suggesting that the race to dominate AI could end in painful corrections for investors betting on perpetual growth.<\/p>\n","protected":false},"excerpt":{"rendered":"Michael Burry, the Wall Street investor who is known for predicting the 2008 housing crash has now intensified…\n","protected":false},"author":2,"featured_media":312050,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,176821,254,255,64,63,176819,176820,176823,105,176822],"class_list":{"0":"post-312049","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-ai-companies-depreciation","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-au","13":"tag-australia","14":"tag-michael-burry-nvidia-criticism","15":"tag-nvidia-memo-analysis","16":"tag-put-options-nvidia-palantir","17":"tag-technology","18":"tag-wall-street-investor"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/312049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=312049"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/312049\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/312050"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=312049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=312049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=312049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}