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Michael Burry and Nvidia are engaged in a heated back and forth about the AI giant’s activity. Yesterday, it was Burry’s turn to clap back.
Burry has expressed doubts about the sustainability of the AI boom and said November 19 that Nvidia’s stock-based compensation had damaged shareholder value. The AI giant disputed those claims in a private memo on November 24, also denying its resemblance to historical accounting frauds and entertainment of circular financing.
The next day, Burry called the memo “disingenuous on the face, and disappointing.”
According to Business Insider, Burry’s Substack post, Unicorns and Cockroaches: Blessed Fraud, said the memo included “one straw man after another” and “almost reads like a hoax.”
Burry said the company misdirected his concern about depreciation. “No one cares about Nvidia’s own depreciation,” he said, because as a chip designer it barely has property, plant, and equipment (PP&E). Rather, he issued warning about depreciation accounting across AI companies.
“The hyperscalers have been systematically increasing the useful lives of chips and servers, for depreciation purposes, as they invest hundreds of billions of dollars in graphics chips with accelerating planned obsolescence,” Burry wrote.
Still, he confirmed again that he owns puts against both Nvidia and Palantir.
But Burry isn’t the only rival that has emerged for Nvidia as of late.
Google Emerges as Chip Competitor
Nvidia’s shares fell on November 25 after reports emerged that Meta, one of its key customers, may start using Google’s tensor processing units (TCUs) for its data centers.
Nvidia holds the vast majority of the market for AI chips, powering the data centers that operate the biggest AI tools, like ChatGPT. In October, it became the first ever company to reach a market value of $5 trillion.
But now, Google’s custom chips are emerging as a viable competitor. Google released Gemini 3 in early November, its AI model that is trained on its own TCUs but can also operate with Nvidia’s GPUs.
Adam Sullivan, chief executive of data-center operator Core Scientific, called the competition between Google and Nvidia “the biggest story in AI right now.”
“They’re in a race to secure as much data-center capacity as they can,” he said.
Nvidia Fights Back
After its stock dropped, Nvidia has tried to calm down the rhetoric. The company said in a statement released on X that it was “delighted” by Google’s advances. It also took the opportunity to reemphasize its staying power.
“Nvidia is a generation ahead of the industry—it’s the only platform that runs every AI model and does it everywhere computing is done,” the company wrote. “Nvidia offers greater performance, versatility, and fungibility than ASICs, which are designed for specific AI frameworks or functions.”
But not everyone was convinced of its apparent confidence.
“Being the arms dealer is great until your customers start manufacturing their own weapons,” one comment read.
Nvidia provides its chips, GPUs, to thousands of app developers. Google’s TPUs or ASICs, application-specific integrated circuits, could pose a significant threat, but investors and experts say the tech company needs to first sell them to outside customers.
A Welcome Rivalry
In Nvidia’s earnings call earlier this month, CEO Jensen Huang said that more chips and data drive the progression of AI, which will lead to higher demand for the company’s products.
“Foundation model pre-training scaling is intact and it’s continuing,” he said.
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Ava Levinson
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