Nvidia CEO Jensen Huang Just Put a Nail in Michael Burry's Bear Case
Key Points
Michael Burry argues that the estimated useful life of GPUs used for AI is too long, inflating profits.
The evidence suggests that Nvidia's A100 processors are still at work six years after their introduction.
The controversy continues to weigh on the stock, which is selling for a song.
- 10 stocks we like better than Nvidia ›
Michael Burry is no stranger to controversial market calls. The hedge fund manager and founder of Scion Capital cemented his place in Wall Street history by predicting the subprime lending market crash in 2008. His high-stakes bet earned him $100 million, while his investors banked $725 million. The events were immortalized in the movie The Big Short, and Burry still turns heads with his headline-making calls.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The legendary investor's most recent target has been artificial intelligence (AI) and, more specifically, Nvidia (NASDAQ:NVDA). Burry takes issue with the industry's estimates of the useful life of semiconductors used in AI, believing they are too long.
However, Nvidia CEO Jensen Huang just put a nail in Burry's bear case.
Image source: Nvidia.
A little background
A little context helps illustrate Burry's concerns. Many technology companies estimate the useful life of Nvidia's graphics processing units (GPUs) at six years. For accounting purposes, that means the price of these processors is divided by six, and one-sixth of the cost is expensed as depreciation each year. By spreading the cost of these chips over their useful life, the annual expense decreases, resulting in higher annual profits.
Burry believes the lifespan of these chips should be shorter, saying they should be expensed over two to three years. By extending the useful life to six years, Burry argues companies are inflating their profits.
The proof is in the pudding
Nvidia launched its Ampere A100 Tensor Core GPU in mid-2020. The data center GPU soon became the workhorse of AI, providing 20 times the performance of the previous generation. Yet six years after their introduction, A100 chips are still being used. Just last month, neocloud CoreWeave inked a contract to rent these semiconductors for AI processing through 2029. Far from being obsolete, nine years after they were first released.
Perhaps more telling, the price to rent these older chips is actually increasing. Just this week, in a post on X, financial market platform Ornn Exchange shared details about the use of the slightly newer Hopper H100 chips, noting that the rental price for these processors is up 22% month over month.
Huang shared the post on Tuesday, adding his own .02 cents:
NVIDIA compute is fungible, durable and highly rentable. It is a productive, revenue-generating asset. https://t.co/cvmjaNoiK8
— Jensen Huang (@JensenHuang) September 8, 2026
The evidence clearly refutes Burry's contention that the useful life of Nvidia GPUs is being overstated. As these examples clearly show, these chips are lasting far longer than their estimated useful life.
What it means for Nvidia investors
The biggest takeaway for investors is undeniable. Even as demand for Nvidia's latest generation Vera Rubin and Blackwell processors remains strong, so too does demand for its older Ampere and Hopper chips.
Moreover, this puts a nail in Burry's contention that the useful life of these chips is overstated. If anything, the estimates being used may be too short, and we don't yet know how long these AI powerhouse chips will last.
It's also worth mentioning that at 28 times earnings, Nvidia stock is a steal.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $414,015!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,385,459!*
Now, it’s worth noting Stock Advisor’s total average return is 960% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of September 9, 2026.
Danny Vena, CPA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
