{"id":317442,"date":"2025-11-27T21:49:07","date_gmt":"2025-11-27T21:49:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/317442\/"},"modified":"2025-11-27T21:49:07","modified_gmt":"2025-11-27T21:49:07","slug":"this-thanksgivings-real-drama-may-be-michael-burry-versus-nvidia","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/317442\/","title":{"rendered":"This Thanksgiving’s real drama may be Michael Burry versus Nvidia"},"content":{"rendered":"

While you\u2019ve been sweating the details over Thanksgiving, famed investor Michael Burry \u2013 the one portrayed by Christian Bale played in \u201cThe Big Short\u201d \u2013 has been waging an increasingly aggressive war against Nvidia.<\/p>\n

It\u2019s a battle worth watching because Burry might actually win it. What makes this different from every other warning about an AI bubble is that Burry now has the audience and the freedom from regulatory constraints to potentially become the catalyst for the very collapse he\u2019s predicting. He\u2019s betting against the AI boom, but he\u2019s also proactively trying to convince his growing number of followers that the emperor \u2013 Nvidia \u2013 has no clothes. <\/p>\n

What everyone is now wondering is whether Burry can create enough doubt to truly hobble Nvidia and, by association, the other main characters in this story, including OpenAI.<\/p>\n

Burry has really thrown himself into the effort in recent weeks. He\u2019s been slinging mud at Nvidia; he also traded nasty comments with Palantir CEO Alex Karp after regulatory filings revealed Burry held bearish put options on both companies \u2013 a bet worth over $1 billion that they\u2019d crash<\/a>. (Karp went on CNBC and called Burry\u2019s strategy \u201cbatshit crazy<\/a>,\u201d to which Burry responded by mocking Karp<\/a> for not understanding how to read an SEC filing.) The spat encapsulates the market\u2019s central divide: is AI going to transform everything and thus worth every billion invested, or are we now in mania territory that\u2019s destined to end badly?<\/p>\n

Burry\u2019s allegations are specific and damning. He says Nvidia\u2019s stock-based compensation has cost shareholders $112.5 billion, essentially \u201creducing owner\u2019s earnings by 50%.\u201d He has suggested that AI companies are cooking their books by slow-walking depreciation on equipment that\u2019s losing value fast. (Burry believes that Nvidia customers are overstating the useful lives of Nvidia\u2019s GPUs in order to justify runaway capital expenditures.) As for all that customer demand, Burry has basically proposed it\u2019s a mirage because AI customers are \u201cfunded by their dealers\u201d in a circular financing scheme.<\/p>\n

\"\"<\/p>\n

Enough people have begun citing Burry that Nvidia, despite all its muscle and might and blowout earnings report<\/a> last week, felt compelled to respond recently. In a seven-page memo sent to Wall Street analysts last weekend by Nvidia\u2019s investor relations team \u2013 a development first reported<\/a> by Barron\u2019s \u2013 the company fired back, saying that Burry\u2019s math is wrong, including because he \u201cincorrectly included RSU taxes\u201d (the real buyback figure is $91 billion, not $112.5 billion, the memo says). Nvidia\u2019s employee compensation is also \u201cconsistent with peers.\u201d And Nvidia is definitely, absolutely, not Enron, thank you very much.<\/p>\n

Burry\u2019s response<\/a>, in a nutshell: I didn\u2019t compare Nvidia to Enron. I\u2019m comparing Nvidia to Cisco circa the late 1990s, when it overbuilt infrastructure that nobody actually needed at the time and its stock cratered 75% when everyone realized as much.<\/p>\n

Techcrunch event<\/p>\n

\n\t\t\t\t\t\t\t\t\tSan Francisco
\n\t\t\t\t\t\t\t\t\t\t\t\t\t|
\n\t\t\t\t\t\t\t\t\t\t\t\t\tOctober 13-15, 2026\n\t\t\t\t\t\t\t<\/p>\n

This could all look like a tempest in a teapot by Thanksgiving next year. Or not.<\/p>\n

Nvidia\u2019s stock has gone up twelvefold since early 2023. The company\u2019s market cap at this moment is $4.5 trillion. Its ascent to becoming the world\u2019s most valuable company is faster than anything the market has seen previously. <\/p>\n

But Burry has a track record that\u2019s complicated. He called the housing crisis, which brought him great acclaim. But since 2008, he has been predicting various apocalypses pretty much constantly, earning him the label \u201cpermabear\u201d from critics, while people who listen to him with a kind of cult-like devotion have missed some of the greatest bull runs in market history. Burry smartly bought GameStop early, for example, but he then sold his shares before the meme stock explosion. He shorted Tesla and lost a fortune. After his smart housing crisis call, frustrated investors actually fled his fund because of extended underperformance.<\/p>\n

Earlier this month, Burry deregistered his investment firm, Scion Asset Management, with the SEC. He said it was because of \u201cregulatory and compliance restrictions that effectively muzzled my ability to communicate,\u201d explaining that he was frustrated, watching people misinterpret his tweets on X.<\/p>\n

Last weekend, he launched a Substack called \u201cCassandra Unchained<\/a>\u201d that he\u2019s now using to prosecute his case against the entire AI industrial complex. The descriptor for the newsletter, a yearly subscription to which costs $400, is that it is now Burry\u2019s \u201csole focus as he gives you a front row seat to his analytical efforts and projections for stocks, markets, and bubbles, often with an eye to history and its remarkably timeless patterns.\u201d<\/p>\n

\"\"<\/p>\n

People are definitely listening. The newsletter launched less than a week ago, and it already has 90,000 subscribers. Which brings us again to the truly unsettling question hanging over all of this: Is Burry the canary in the coal mine, warning of a collapse that\u2019s inevitable, or could his fame, his track record, his now unrestricted voice, and a fast-growing audience trigger the very implosion he\u2019s predicting?<\/p>\n

History suggests this isn\u2019t so crazy. Jim Chanos, the famous short seller, didn\u2019t create Enron\u2019s accounting fraud, but his high-profile criticisms in 2000 and 2001 gave other investors permission to question the company and accelerated its unraveling. Prominent hedge fund manager David Einhorn\u2019s detailed takedown of Lehman Brothers\u2019 accounting tricks at a 2008 conference made other investors more skeptical and may have hastened the loss of confidence that led to collapse. In both cases, the underlying problems were real, but a credible critic with a platform created a crisis of confidence that became self-fulfilling.<\/p>\n

If enough investors believe Burry about AI overbuilding, they will sell. The selling will validate his bearish thesis. More investors will sell. Burry doesn\u2019t need to be right about every detail \u2013 he just needs to be persuasive enough to trigger the stampede. Looking at Nvidia\u2019s November performance, it\u2019s easy to conclude Burry\u2019s warnings are taking hold; seeing its shares\u2019 performance over the entire year, it\u2019s less obvious that\u2019s the case.<\/p>\n

Much clearer is that Nvidia has everything to lose, including an almost mind-blowingly massive market cap and its position as the most indispensable company of the AI age. Meanwhile, Burry has nothing to lose but his reputation and a new megaphone that he\u2019ll presumably be using at full volume for the foreseeable future.<\/p>\n","protected":false},"excerpt":{"rendered":"While you\u2019ve been sweating the details over Thanksgiving, famed investor Michael Burry \u2013 the one portrayed by Christian…\n","protected":false},"author":2,"featured_media":317443,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28,145924,4321],"class_list":{"0":"post-317442","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-michael-burry","10":"tag-nvidia"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/317442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=317442"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/317442\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/317443"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=317442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=317442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=317442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}