Michael Burry

“Michael Burry, the investor known for calling the 2008 housing crash, called Etched 'serious competition' for NVIDIA based on its advanced inference chip and Nvidia talent recruitment.”

AI hardware accounting uses straight-line depreciation that mismatches actual value generation curves, creating a $680 billion accounting gap similar to Bitcoin mining rigs, where older chips remain profitable only due to supply constraints.

“Agreed that there's a problem with the mismatch between straight-line depreciation and residual value for AI hardware.”

The AI revolution has shifted from reinforcement learning agents to large-scale pre-trained models using Transformers and scaling laws, with agents now re-emerging enhanced by pre-training insights, but fundamental questions remain about whether the massive capital investment is justified.

“Predicted the 2008 crash and is now skeptical about trillions pouring into AI infrastructure.”

Despite NVIDIA's record $57 billion Q3 revenue growth, financial analysis reveals concerning cash flow gaps, inventory buildup, and extended payment terms suggesting potential circular financing dynamics and customer dependency risks.

“Mentioned as talking about 'circular financing' theories related to the AI hardware market.”