Burry: AI Depreciation Tactics Inflate Tech Giants’ Profits
Activist investor Michael Burry accuses major tech and cloud providers—including Meta, Amazon, Microsoft, Google, and Oracle—of using aggressive AI depreciation schedules to understate expenses and inflate earnings. In SEC filings, Burry shows that depreciation periods for AI-focused servers have been extended from three years to five or six, deferring an estimated $176 billion in charges between 2026 and 2028. He warns this AI depreciation manipulation masks true capital costs, distorts P/E ratios, and could overstate profits by about 27% for Oracle and 21% for Meta by 2028. Burry’s disclosures of significant put‐option positions on Nvidia and Palantir underscore his skepticism and highlight the risk of hidden capex. He promises further details on November 25. Traders should monitor AI depreciation practices and potential earnings revisions that may trigger market revaluations and affect tech‐sector multiples.
Neutral
This development is unlikely to affect crypto assets directly as it centers on traditional tech stock accounting practices. While broader risk sentiment may shift if tech multiples contract, the absence of any mention of blockchain or platform tokens suggests minimal impact on cryptocurrency trading. Short-term, it may temper AI investment sentiment, but long-term, crypto markets driven by decentralized finance and adoption dynamics remain unaffected.