Remember Michael Burry? The guy who basically called “YOLO” on shorting the housing market in 2008 and made bank while everyone else was crying into their foreclosure notices? Well, he’s back with another hot take, and this time he’s got his sights set on the AI boom.
Burry’s latest theory? All those shiny AI earnings that have been making tech stocks go brrrr might be about as real as a three-dollar bill. He’s claiming Big Tech is pulling some classic accounting shenanigans that could inflate profits by a whopping $176 billion. That’s not pocket change – that’s “buy a small country” money.
The Accounting Magic Trick
Here’s the deal: companies like Meta and Oracle have been playing fast and loose with how long they think their AI hardware will last. Instead of saying “this fancy computer will be obsolete in 3 years” (which, let’s be honest, is probably accurate given how fast tech moves), they’re now saying “nah, this baby will chug along for 5-6 years.”
Why does this matter? It’s all about depreciation – basically how much you write off each year as equipment gets older. Stretch out the timeline, and suddenly you’re writing off less each year, which makes your profits look way better on paper. It’s like saying your iPhone will last 10 years instead of 3. Technically possible? Maybe. Realistic? Come on.
Burry’s math suggests Oracle could be padding profits by 27% and Meta by 21% through this little accounting dance. That’s some serious creative bookkeeping.
But Wait, There’s a Plot Twist
Here’s where it gets interesting. Unlike the 2008 housing crisis, the AI boom has some pretty powerful friends. We’re talking about governments treating AI like it’s the Manhattan Project, not Pets.com. When Uncle Sam is basically saying “we must beat China at AI or die trying,” that changes the game.
Plus, you’ve got billionaires like SoftBank’s Masayoshi Son literally selling $5.8 billion worth of Nvidia stock – not because he’s bearish on AI, but because he wants to double down even harder on OpenAI and massive data center projects. That’s some next-level conviction.
So What’s the Verdict?
Look, Burry’s track record speaks for itself. When he waves red flags, smart money pays attention. But this time feels different. The AI revolution has unprecedented backing from both Wall Street and Washington. ChatGPT hit a million users in five days – faster than any platform in history. That’s not hype; that’s genuine adoption at warp speed.
The smart play? Keep your eyes open. Watch those earnings quality metrics, especially as we hit 2026-2027 when the “will this hardware actually last?” question gets answered. But don’t let fear of a potential bubble keep you completely on the sidelines of what might be the biggest technological shift since the internet.
After all, even if Burry’s right about the accounting tricks, he might be wrong about the timing. And in markets, being early can feel a lot like being wrong – just ask anyone who shorted Tesla too soon.