Burry Stokes Fear, AMD Shines, GPT-5.1 Launches

TLDR;

Welcome back!

This week, we take a look at all the recent drama Burry and other AI hawks are causing, how JPMorgan is adding fuel to the fire, some very impressive results by AMD, OpenAI’s GPT-5.1 launch, Anthropic’s first infrastructure deal, and an analysis of a group of companies that play a crucial role in AI but almost no one knows about.

Enjoy!

BUBBLE

Legendary Investor Burry Calls Bullshit on GPUs

You know Burry is committed to a trade when he starts tweeting again. The legendary investor who shorted the market back in 2007 and made a killing on it, while being immortalized by Christian Bale in the film The Big Short, has become quite the hawk regarding AI, having massively shorted both Palantir and NVIDIA.

But he’s now upping the ante and directly accusing Big Tech AI companies of accounting fraud by lengthening the depreciation schedules of GPUs.

So, what exactly is going on?

At the center of the AI trillion-dollar buildout are the GPUs, the chips that train and run AI. These are products that produce a tremendous amount of computation throughput, but generate a lot of heat when run at high utilization rates.

Historically, this has meant that their depreciation schedule averages three years, indicating the hardware’s lifespan is typically just three years under normal circumstances.

So what? Well, because according to account rules, the value of the asset is not expensed as a one-time cost once you purchase it, but proportionally depreciated according to its expected lifespan.

This expense subtracts from your revenues, decreasing your profits (on paper). Of course, the shorter the depreciation schedule, the more you subtract each year.

And here’s where the accounting trick emerges. Hyperscalers are now stating that the schedule is too short and intend to utilize these products for many more years (most of them have settled on a six-year lifespan, double the initially expected value), thereby decreasing the amount subtracted from revenues each year as the cost is now diluted over an extended period.

Thus, Burry is accusing these companies of inflating short-term revenues by increasing the schedule, while suggesting those schedules are untenable.

A particularly arrogant case is Coreweave, which is now depreciating their overall data center equipment to twelve years, very convenient considering they have small revenues compared to their outstanding debt and, more importantly, have had a hiccup with one tenant (Core Scientific) and thus reduced their revenue guidance for Q4 considerably (and crashed almost 20% in consequence).

They are depreciating $0.63 billion, which, at their current asset value, means they are depreciating their overall data center equipment by up to twelve years.

Things are looking very tough for CoreWeave lately, with credit default swaps skyrocketing over 700 (they were at 500 on Sunday when we covered it), meaning people are growing concerned over a potential default, and even getting grilled by Jim Cramer live on CNBC.

On the other hand, Nebius, a company offering a very similar “product” to Coreweave, depreciates GPUs at a…

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