Michael Burry, the hedge fund manager who became a household name by shorting the housing market before the 2008 crash, has a new target. This time it’s not mortgage-backed securities. It’s GPU-backed securities.
On May 29, Burry published a detailed critique on Substack dissecting a $5.4 billion transaction between Nvidia, a special-purpose vehicle called Valor, and Elon Musk’s xAI. His verdict on the deal’s financial engineering: “fugazi.”
How the deal works
Nvidia sold over 100,000 GB200 GPUs to Valor, a newly created special-purpose vehicle established specifically to hold the chips. That sale generated $5.4 billion in revenue for Nvidia.
But Nvidia didn’t just sell and walk away. The company also injected $1.9 billion of its own equity into Valor as a limited partner. In English: Nvidia sold the GPUs to an entity it partially funded.
