Michael Burry flags Nvidia's $500 billion AI financing deal as proof of 'byzantine' money loop behind chip sales

Michael Burry, known for his successful short position on AI stocks, has criticized Nvidia's recent $500 billion AI financing deal as proof of the company's inflationary demand. In Nvidia's Q2 fiscal 2027 earnings report, the company reported $96.2 billion in revenue and $59.6 billion in net income, both exceeding Wall Street estimates.

CEO Jensen Huang boasted about a "golden age of new AI labs and startups," leading many investors to believe in the future of AI growth. However, Burry argues that the demand for AI chips is more about circular financing than genuine sales to customers. Nvidia recently announced a partnership with six financial institutions to inject $500 billion into AI infrastructure over the next few years, aiming to quell fears of circular financing.

Despite this, Morgan Stanley raised concerns about Nvidia's potential credit exposure, estimating it could reach $200 billion by 2028.