Michael Burry, the investor made famous by “The Big Short” who recently roiled the market with a tech short bet, is accusing some of America’s largest technology companies of using aggressive accounting to pad their profits from the artificial intelligence boom.
In a post on X Monday, the Scion Asset Management founder alleged that “hyperscalers” — the major cloud and AI infrastructure providers — are understating depreciation expenses by estimating that chips will have a longer life cycle than is realistic.
“Understating depreciation by extending useful life of assets artificially boosts earnings - one of the more common frauds of the modern era,” Burry wrote. “Massively ramping capex through purchase of Nvidia chips/servers on a 2-3 yr product cycle should not result in the extension of useful lives of compute equipment. Yet this is exactly what all the hyperscalers have done.”
Burry estimated that from 2026 through 2028, the accounting maneuver would understate depreciation by about $176 billion, inflating reported earnings across the industry. He singled out Oracle
and Meta
