Was Michael Burry Right About AI Stocks for the Wrong Reason?

Michael Burry published a critique in November alleging major AI companies are artificially inflating profits by extending depreciation schedules on GPUs and servers well beyond their useful lives. If accurate, the practice could overstate quarterly profits and margins, invite investor and regulatory scrutiny, and put downward pressure on valuations for AI hardware-dependent firms.

Analysis

Michael Burry published a critique in November alleging major AI companies are artificially inflating profits by extending depreciation schedules on GPUs and servers well beyond their useful lives. If accurate, the practice could overstate quarterly profits and margins, invite investor and regulatory scrutiny, and put downward pressure on valuations for AI hardware-dependent firms.