'Big Short' Michael Burry Alleges Tech Giants Inflate AI Profits

Benzinga

Michael Burry accused major tech firms of inflating AI-era profits by extending chip and server lifespans to reduce depreciation. He warned the practice could overstate profits by billions and compared today’s AI boom to the 1990s tech bubble.

Transcript

00:00It's Benzinga, bringing Wall Street to Main Street.

00:03Michael Burry, the big short investor who recently disclosed large put positions against

00:07NVIDIA and Palantir, accused major tech companies of inflating AI-era profits through aggressive

00:12accounting. According to CNBC, the Cyan Asset Management founder alleged that hyperscalers

00:18are understating depreciation by extending the useful life of chips and servers, artificially

00:23boosting earnings. Burry estimated the maneuver could understate depreciation by $176 billion

00:30from 2026 to 2028, overstating Oracle's and Meta's profits by about 27 percent and 21 percent.

00:38Respectively, NVIDIA declined to comment. While CNBC said it couldn't independently confirm

00:43the claims, Burry compared current AI optimism to the 1990s tech bubble and teased more detail

00:48coming on November 25th. NVIDIA shares rose nearly 6 percent Monday after a 7 percent drop

00:54last week. For all things money, visit Benzinga.com.

Category

Transcript

Be the first to comment

Recommended