Michael Burry Defends His Nvidia Criticism As Company Pushes Back

Michael Burry is standing by his criticism of Nvidia Corp. even after a report said the leading artificial intelligence company pushed back on his analysis.

Burry, who became famous for his bets against the housing market during the 2008 financial crisis, last week in a post on X called out the company for its stock-based compensation dilution and stock buybacks. Nvidia responded by sending a memo to Wall Street analysts over the weekend to address such claims, according to a Barron’s report.

In a separate X post Monday, Burry said he stands by his analysis and that he would release more thoughts on his timeline. He also touted a post on his Substack.

Burry did not immediately respond to a request for comment. Nvidia, based in Santa Clara, California, also didn’t immediately respond.

Nvidia has come under increased scrutiny from Burry in recent weeks over the circularity of AI deals, revenue recognition and how megacap technology companies depreciate computing gear. Nvidia shares rose 2.1% Monday but remain 12% below a late-October record.

Burry’s comments come amid growing caution from investors worried about a possible AI bubble. Nvidia and rival Advanced Micro Devices Inc. have sparked concern among some investors by making “circular” deals with artificial intelligence providers. In an agreement with OpenAI, Nvidia plans to invest as much as $100 billion in the startup, which in turn would build data centers with millions of Nvidia chips.

These kinds of arrangements — reminiscent of some dot-com-era partnerships — risk inflating the market and tying the fate of numerous companies together.

Also at issue is how quickly Nvidia’s pricey chips — known as graphics processing units, or GPUs — will become obsolete. That’s a major consideration when companies are poised to pour trillions into outfitting data centers with the technology.

Nvidia faces broader questions over whether spending on AI infrastructure is sustainable. Chief Executive Officer Jensen Huang pushed back on the bubble fears last week when he delivered quarterly results, saying that business remains strong.

Nvidia said that sales will be about $65 billion in the January quarter, roughly $3 billion more than analysts predicted. The company also indicated that a half-trillion-dollar revenue surge expected in the coming quarters may be even bigger than anticipated.

“There’s been a lot of talk about an AI bubble,” Huang said at the time. “From our vantage point, we see something very different.”