Mr. Big Short vs. the AI giants: Michael Burry’s big accusation. "Among the most common frauds of the modern era." The post on X.
Are those spectacular profits being raked in by the AI giants all a big hoax? The question arises spontaneously, in the wake of the big accusation that Mr. Big Short Michael Burry has recently launched against the AI giants, the so-called AI hyperscalers — large-scale cloud and computing infrastructure providers.
From the massive social media platform X, Michael Burry lashed out against the industry, accusing it of using aggressive accounting practices.
In his opinion, the most important AI players, namely the main providers of cloud services and AI infrastructure, are knowingly underestimating depreciation expenses, estimating chip life cycles (semiconductors) that are longer than economically realistic.
Michael Burry, Mr. Big Short, attacks the AI giants. "Your profits are inflated." The post on X
Thus Michael Burry, founder of the hedge fund Scion Asset Management, in the post published on X:
“Understating depreciation by extending the useful life of assets artificially inflates reported earnings—one of the most common frauds of the modern era. A massive increase in capital expenditure (capex), with the purchase of Nvidia chips and servers on a 2–3 year hardware replacement cycle, should not translate into an extension of the useful life of computing equipment. But that’s exactly what all the hyperscalers have done.”
Burry (renamed Cassandra by Buffett) names Oracle and Meta
Result? From his X account, Cassandra Unchained @michaeljburry - as it is written, the official account of “The Big Short” Michael J. Burry, M.D., who has been dubbed “Cassandra” by the Oracle of Omaha Warren Buffett - Burry explained that, from 2026 to 2028, the accounting tricks implemented by US Big Tech companies active in AI would understate cumulative depreciation expenses by approximately $176 billion, making earnings appear higher than they would be if depreciation expenses were properly recorded in the income statement.
Mr. Big Short has singled out two giants betting on AI: Oracle and Meta Platforms, the latter a prominent member of the Magnificent Seven stocks, a giant managed by Mark Zuckerberg that owns the three apps WhatsApp, Facebook, and Instagram.
In his opinion, Oracle and Meta Platforms could see earnings rise by 27% and 21%, respectively, by 2028.
Michael Burry has been sounding the alarm about all the risks associated with AI for some time, as revealed in another post published a few days ago, in which he revealed that his hedge fund had put options speculating on a decline in Nvidia and Palantir’s stock prices, both of which are among the most important players in the artificial intelligence market.
Burry wrote, again on X: “Sometimes, we see bubbles. Sometimes, you have to do something. Sometimes, the only winning move is not to play.
The great fear on Wall Street, and not just of an AI bubble ready to burst
The attention has not gone unnoticed: far from it, given that investors, fearing the formation or even the bursting of the AI bubble, have moved from words to action, dumping shares of companies in the artificial intelligence sector last week.
After all, the man who made one of the greatest bets in modern finance: Michael Burry, who made millions of dollars by predicting the bursting of the bubble that formed in the US real estate market in 2008: a speculative bubble that ushered in the great global financial crisis.
He was the inspiration for the film "The Big Short," which starred Christian Bale in his role. A film that Michael Burry himself remembered in another recent post.
Palantir CEO’s anger at Burry’s short bet
The major AI players directly affected by Mr. Big Short’s short bets immediately lashed out at Burry, following the announcement of put options with a notional value of approximately $187 million on Nvidia and $912 million on Palantir—the latter already under attack from short sellers—purchased by the major American investor.
In particular, Palantir CEO Alex Karp immediately labeled Burry’s bets "super weird" and "completely crazy," although, as a CNBC article notes, it’s still unclear whether those positions are still active or whether it was simply a hedging strategy.
The fact that it was Michael Burry who sowed the seeds of great suspicion has fueled the equally great fear of an AI bubble about to burst.
The alarm bells about Mr. Big Short’s AI are still ringing on Wall Street. And it doesn’t end there
It must be said that, in the session the day before yesterday that kicked off the new trading week on Wall Street, Monday, November 10th, and after a week to forget—which saw artificial intelligence stocks decline sharply—Nvidia rebounded by nearly 6%, while Palantir rallied by nearly 9%.
The two stocks targeted by Mr. Big Short were coming off sell-offs last week, falling 7% and 11%, respectively, which had significantly impacted the trend of the Nasdaq Composite, causing a sharp erosion of sentiment on Wall Street and across global stock markets.
Last Monday’s rally in the two stocks, however, lasted only the time of one session, as yesterday, Tuesday, November 11, 2025, the entire tech sector reversed its gains, with Nvidia paying the price for an investment giant’s decision to completely abandon its stake in the AI chip giant.
For his part, Mr. Big Short is preparing new announcements, after saying that he will reveal more details on November 25, 2025, advising investors to "stay tuned."
Original article published on Money.it Italy 2025-11-12 08:55:14. Original title: Mr. Big Short contro i colossi dell’AI. È tutta una bufala
