Nvidia Fires Back at AI Bubble Accusations

Nvidia has publicly refuted allegations of financial impropriety, directly countering claims of an Enron-style scandal. The chipmaker, currently the world's most valuable company, has issued a note to analysts to address concerns raised by trader Michael Burry. Burry, who famously predicted the 2008 housing crisis, suggested that the AI sector, particularly Nvidia, might be artificially inflating revenues through a network of circular deals rather than genuine market demand.

These assertions come as Nvidia's stock faced a recent sell-off, partly influenced by reports that Google is exploring the development of its own AI chips. This move by a competitor could shift the market dynamics and challenge Nvidia's dominance. Despite the recent market jitters and its valuation falling from $5tn, Nvidia insists its business model is economically sound and its reporting complete and transparent, explicitly stating it does not resemble historical accounting frauds.

Nvidia's defense directly challenges Burry's claims regarding suspicious revenue recognition and the lifespan of its graphics chips. The investor has reportedly made significant bets against Nvidia and Palantir, anticipating a stock price decline. The company's firm rebuttal aims to reassure investors and analysts about the integrity of its financial practices and the underlying strength of its AI-driven business.