Burry warns Nvidia’s $500 billion AI financing deal has ‘shades of Enron’

Michael Burry, the investor who predicted the 2008 housing collapse and was portrayed by Christian Bale in "The Big Short," warned that Nvidia’s $500 billion AI financing arrangements carry "shades of Enron." In a Substack post, Burry said circular financing involving Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR could inflate chip demand, obscure leverage and make future revenue "majority financed in a circular arrangement" rather than driven by organic end-user demand. He cited special-purpose vehicles, off-balance-sheet financing and captive insurers as mechanisms that may conceal risk. Burry also highlighted Oracle’s $638 billion in remaining performance obligations, including $75 billion tied to bring-your-own-hardware or prepaid customer arrangements, alongside plans to raise $40 billion in fiscal 2027 to fund a $70 billion capital-expenditure program. Nebius Group’s capital stack includes Nvidia pre-funded warrants, convertible debt and uncommenced lease obligations. Citing Apollo chief economist Torsten Slok, Burry noted that private non-residential construction excluding data centers fell 7.9% year over year in June while data-center construction accelerated after the Federal Reserve began raising rates in 2022. Nvidia reported Q1 FY27 revenue of $82 billion, with total supply commitments and prepaids reaching $145 billion. Burry has positioned against Micron, Oracle, Nvidia-backed Nebius, Palantir and Tesla. Nvidia shares fell 0.9% to $214.87 in Friday midday trading, extending a sixth consecutive losing session, while Oracle and Palantir gained. Nvidia has not publicly responded to Burry’s specific allegations.

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