U.S. approves sale of 70,000 AI chips to UAE and Saudi Arabia, WSJ reports
Investing.com-- Michael Burry on Wednesday evening warned that true end demand for artificial intelligence was far smaller than what was being presented, while also accusing major technology firms of misrepresenting their revenue.
Burry’s comments came shortly after bumper quarterly earnings from AI bellwether Nvidia, which sparked a global rally in technology shares.
Burry, famous for predicting and trading the 2008 subprime mortgage crisis, posted a picture of a graphic outlining AI investing deals between several major technology companies, including Microsoft Corporation (NASDAQ:MSFT), OpenAI, Oracle Corporation (NYSE:ORCL), and NVIDIA Corporation (NASDAQ:NVDA), while accusing them all of “suspicious revenue recognition.”
“The future will regard this a picture of fraud, not a flywheel. True end demand is ridiculously small. Almost all customers are funded by their dealers,” Burry said.
In a later post, he accused OpenAI of being the “linchpin,” while also raising questions over the AI startup’s auditor.
Burry, who returned to the public eye in November after a years-long hiatus, dropped several warnings on an AI-fueled bubble in tech valuations. He disclosed short positions against Nvidia and Palantir Technologies Inc (NASDAQ:PLTR), while also accusing major AI spenders of misrepresenting the depreciation of their data center assets.
His warning on Wednesday came just hours after Nvidia clocked stronger-than-expected third-quarter earnings, with the AI major also presenting a stronger-than-expected outlook on robust AI-fueled demand.
Nvidia CEO Jensen Huang pushed back against speculation over an AI bubble, claiming that demand for the company’s products extended beyond just AI hyperscalers.
Nvidia’s shares surged over 5% in aftermarket trade following the earnings, with broader tech and AI stocks all clocking strong gains. U.S. stock index futures also shot up after the print.