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Started By
Message
‘Big Short’ investor Michael Burry accuses AI hyperscalers of artificially boosting earnin
Posted on 11/11/25 at 8:40 am
Posted on 11/11/25 at 8:40 am
LINK
He's such a little bitch...
He's such a little bitch...
quote:
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.
2
Posted on 11/11/25 at 8:46 am to BCreed1
Seems like chips that never get a break from crunching data would have a shorter than average lifespan.
Posted on 11/11/25 at 9:07 am to nolaks
No he isn't. He's short on all of this by BILLIONS and has launched a campaign to force the prices lower.
Posted on 11/11/25 at 9:32 am to BCreed1
quote:
No he isn't. He's short on all of this by BILLIONS and has launched a campaign to force the prices lower.
I’m certain he has bias, but how do you know for a certainty he is wrong?
Posted on 11/11/25 at 9:34 am to BCreed1
quote:
No he isn't. He's short on all of this by BILLIONS and has launched a campaign to force the prices lower.
Can someone explain the logistics of his 'investing'.
So he 'bought' $900M worth of AI puts? Is the option market really big enough for him to do that?
Posted on 11/11/25 at 10:16 am to BCreed1
These chips not being depreciated at the same rate are being used internally. Companies can make a choice to use them longer internally as a cost savings. Since it doesn’t effect customer data loads, they don’t need to be replaced every 3 years.
Posted on 11/11/25 at 1:05 pm to BCreed1
quote:
No he isn't. He's short on all of this by BILLIONS and has launched a campaign to force the prices lower.
He's not creating a story because he's short. He took his position because of his theory.
This also isn't some new thing Burry has brought to light, its criticism that people have been harping on for quite some time.
Posted on 11/11/25 at 1:07 pm to Upperdecker
quote:
These chips not being depreciated at the same rate are being used internally. Companies can make a choice to use them longer internally as a cost savings. Since it doesn’t effect customer data loads, they don’t need to be replaced every 3 years.
Are they using straight-line depreciation, though? At a minimum they probably should be using double declining
Posted on 11/11/25 at 1:15 pm to barry
Funny that that guy is accusing other people of manipulating the market, even though that is what he is famous for.
Posted on 11/11/25 at 1:20 pm to Jax-Tiger
quote:
Funny that that guy is accusing other people of manipulating the market, even though that is what he is famous for.
he's accusing them of accounting fraud
What has Burry done that is illegal?
Posted on 11/11/25 at 1:44 pm to barry
quote:
What has Burry done that is illegal?
Technically, his investments are legal, but he uses his influence and tweets to manipulate the market to further his position and profits.
Posted on 11/11/25 at 2:06 pm to barry
quote:
Are they using straight-line depreciation, though?
of course they are - many of these many of these GPUs are subject to five year revenue deals with hyperscaler clients where revenue stays consistent year to year. Why would you not match the expected benefit to the revenue?
Posted on 11/12/25 at 12:12 pm to igoringa
quote:
of course they are - many of these many of these GPUs are subject to five year revenue deals with hyperscaler clients where revenue stays consistent year to year. Why would you not match the expected benefit to the revenue?
We don't know that to be the case. Also what Burry is saying is that the deprecation isn't matching the revenue.
Posted on 11/12/25 at 12:13 pm to Jax-Tiger
quote:
Technically, his investments are legal, but he uses his influence and tweets to manipulate the market to further his position and profits.
What major investor doesn't tout their positions, whether long or short after they have been made?
Posted on 11/12/25 at 12:37 pm to barry
quote:
We don't know that to be the case. Also what Burry is saying is that the deprecation isn't matching the revenue.
We have had multiple deals in the past several weeks that are based off this, so we do know some of these are clearly the case.
For example, the IREN MSFT deal is a 5 year revenue deal - $9.7 billion ratably over the contract with IREN responsible to provide the B300 chips for 5 years. That is the term of the agreement - why would they not depreciate these over 5 years at a minimum.
If they have other similar GPUs for other non long term arrangements - I would really question a delta off 5 years given the nature of these contracts.
Posted on 11/12/25 at 12:47 pm to Jax-Tiger
quote:
Technically, his investments are legal, but he uses his influence and tweets to manipulate the market to further his position and profits.
Arrest him now!!
ETA: He is causing the stock market crash
This post was edited on 11/12/25 at 12:48 pm
Posted on 11/13/25 at 5:01 pm to barry
quote:
He's not creating a story because he's short. He took his position because of his theory.
This also isn't some new thing Burry has brought to light, its criticism that people have been harping on for quite some time.
This is exactly correct .
quote:
why would they not depreciate these over 5 years at a minimum.
They could ….. but it doesn’t mean this chips will be in use…. “law of obsolescence “
This post was edited on 11/13/25 at 5:05 pm
Posted on 11/13/25 at 5:12 pm to Kingpenm3
quote:
he 'bought' $900M worth of AI puts
Premium cost vs notional amount are two very different things.
For example one put option may cost $1,000 but you get $10,000 of notional exposure. Less capital, but far more risk using leverage.
So whatever the headlines are for his shorts, the actual cost of the bets is far less. Headlines tend to only post the notional exposures.
Posted on 11/13/25 at 5:16 pm to cadillacattack
quote:
They could ….. but it doesn’t mean this chips will be in use…
they will be in use if they are subject to a binding five-year contract. This is the part that I'm not understanding. A customer has contracted the use of the asset four or five years at consistent revenue levels for the five years. Under what perversion of US GAAP would one suggest that a useful life should be less than five years in that pattern or should be anything other than straight line.
If under a standard five year revenue contract like the example I gave like so many of these deals are any acceleration of depreciation with materially mistate the comparability and economics of the contract.
No, yes I know there is GPU purchases that are not subject to these contracts - but if you have a significant portfolio of a counterparty signing five year deals for the use of a specific chip. I find it rather challenging to argue as useful life is overstated if five years is used.
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