Michael Burry, the investor who made a fortune predicting the 2008 housing crisis, is back with another contrarian thesis. This time he’s targeting the backbone of the AI boom: the GPUs powering it.
Burry has disclosed short positions across the AI hardware ecosystem, including Nvidia at $198.09, Tesla at $416.22, Caterpillar at $1,060.98, Applied Materials at $729.40, and the iShares Semiconductor ETF (SOXX) at $642.80.
The $176 billion accounting question
Nvidia’s GPUs have a realistic operational lifespan of roughly 2-3 years. Jensen Huang has acknowledged at GTC events that Nvidia’s product release cycle has accelerated to annual updates, meaning older chip architectures depreciate rapidly as new ones arrive.
The companies buying these GPUs are accounting for them as though they’ll last much longer. Microsoft extended its depreciation period for GPUs from 4 to 6 years. Meta has adopted a 5.5-year schedule for its GPU assets. Other hyperscalers, including Google, Amazon, and Oracle, are playing similar games with their depreciation timelines. That makes their annual expenses look smaller, and their profits look bigger.
