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Burry vs. Nvidia: AI Bubble Fears Ignite
21 Nov
Summary
- Michael Burry criticizes Nvidia's chip longevity and AI deal sustainability.
- Nvidia's CFO projects substantial revenue from new AI chip architectures.
- Burry argues customer chip use doesn't equate to value creation.
Michael Burry, renowned for "The Big Short," has intensified his scrutiny of Nvidia and the burgeoning AI sector, even after the chipmaker reported robust earnings. He voices concerns regarding the long-term viability of Nvidia's chips, potential stock dilution, and the nature of "give-and-take deals" within the AI industry.
Nvidia's executives have pushed back against the notion of an AI bubble. During a recent earnings call, Chief Financial Officer Colette Kress projected substantial revenue streams from upcoming chip generations, estimating trillions in annual AI infrastructure investment by 2030. CEO Jensen Huang stated that their perspective differs significantly from bubble discussions.
Kress highlighted that Nvidia's CUDA software extends the functional life of its GPUs, ensuring older models remain in high demand. Burry, however, disputes this, arguing that physical utilization of equipment does not equate to accounting value or profitability, likening the situation to airlines retaining older, marginally profitable aircraft.
