Michael Burry, the investor best known for predicting the 2008 financial crisis, has accused leading technology companies of manipulating their accounting to exaggerate profits from the AI boom. In a post on X, the Scion Asset Management founder claimed that major “hyperscalers” — including large cloud and AI infrastructure providers — are understating depreciation expenses by extending the estimated lifespan of chips and compute equipment.
Burry argued that by lengthening depreciation cycles, companies can lower reported expenses and artificially inflate earnings. He estimated the practice could understate depreciation by $176 billion between 2026 and 2028, potentially overstating profits for firms such as Oracle and Meta Platforms by 27% and 21%, respectively.
While Burry’s accusations are difficult to verify, they raise questions about how aggressively tech giants are accounting for massive AI-related capital spending on Nvidia chips and servers.
The remarks follow Burry’s recent short positions against Nvidia and Palantir Technologies, disclosed in a regulatory filing. Burry has compared current AI market exuberance to the late-1990s tech bubble and said more details on his claims will be released on November 25.
