Nvidia's Kool-Aid: Are We All Just Blindly Chugging It?
Okay, so Nvidia's earnings blew the roof off. Again. And Jensen Huang's out there, all smiles, telling us there's no AI bubble. Right. Like I'm gonna believe the guy swimming in a pool of money printed by selling shovels in the AI gold rush.
He says, "From our vantage point, we see something very different." Translation: "Keep buying my chips, suckers!"
And then there's Colette Kress, the CFO, yapping about "visibility to $0.5 trillion in Blackwell and Rubin revenue." Half a TRILLION? Seriously? It's like these people are living on another planet. Or maybe they just think we are.
Burry's Still Barking at the Moon
Michael Burry, bless his heart, is still trying to yell some sense into the room. He's calling out Nvidia on their accounting tricks, how they're stretching the "useful life" of their old chips to make the numbers look better. He's saying just because some ancient A100 GPU is still chugging along doesn't mean it's actually profitable.
He even uses the airline analogy – airlines keeping old planes around for the holidays. Marginally profitable, energy inefficient... it's a decent point. But does anyone care? Nah. Everyone's too busy chasing the green dragon.
Burry's other point about the "give-and-take deals" between Nvidia, OpenAI, Microsoft, and Oracle... that stinks to high heaven. "True end demand is ridiculously small," he says. "Almost all customers are funded by their dealers." So, it's all just one big, incestuous circle jerk of money. According to a recent report, 'Big Short' investor Michael Burry takes aim at Nvidia after its earnings blowout, Burry has been particularly critical of Nvidia's accounting practices.
And the stock buybacks? $113 billion worth, but they still have more shares outstanding? How does that even work? Oh right, stock-based compensation. The "true cost" of that dilution is $112.5 billion, according to Burry. Ouch.
He even dares to ask who audits OpenAI. Like anyone in Silicon Valley gives a damn about audits.
Buffett Jumps on the Bandwagon (Maybe)
But here's where it gets really weird. Warren Buffett, the Oracle of Omaha himself, apparently bought $4.3 billion worth of Alphabet shares. Alphabet, which is balls-deep in AI. Offcourse, it could have been one of his portfolio managers making the move, but still...
Buffett, the guy who famously avoids tech stocks, is now betting on AI? It's either a sign of the apocalypse, or a sign that I'm completely wrong about this whole thing.
Wait a minute, am I the crazy one here? Maybe. Probably.
All this "AI revolution" talk... it's exhausting. Meta's using AI to make people spend more time on Facebook? Salesforce is using it to make their engineers 30% more efficient? Whoop-dee-doo. It all just feels like a giant race to the bottom, where the only winner is Nvidia.
And these "hyperscalers" are planning to spend over a TRILLION dollars on capital expenditures from 2025 to 2027? $1.15 trillion. That's more money than some countries make in a decade.
My toilet is leaking. I should probably fix that.
So, What's the Real Story?
Look, I ain't saying Nvidia's a scam. They're making real money, selling real chips. But this whole AI frenzy feels like a house of cards built on hype and cheap money. And when the music stops, a lot of people are gonna be left holding the bag.
