NVIDIA just convinced the biggest credit firms on earth to bet $500 billion that Michael Burry is wrong
The bet is over ONE number: how long does a GPU live?
Jensen thinks it's longer than most and a new asset class w/ a secondary market
The hyperscalers write off GPUs over 5 to 6 years (Amazon uses 5, Meta 5.5, Google 6)
On the other hand, Burry's famous bear thesis says the real life is 2 to 3 years becuase the newer models make the older models effectively worthless. If true, this would mean the industry is overstating profits by roughly $176 billion from 2026 to 2028
Here's why this one number matters so much. On every $100B of GPU capex:
1. 3 year life = $33B a year of depreciation expense
2. 6 year life = $17B a year
3. 8 year life with resale value = $10B a year
The gap between Burry's world and Jensen's world is $20B+ of profit per year on every $100B spent, and the industry now spends well over $500B a year!
So who's right and is this new $500B AI infra fund a risk on the market?
Let's look at what the market is paying for it right now: A100s are 6 year old chips, fully depreciated, worth roughly zero on the books, and their rental price is UP about 25% this year (see the chart I reposted below) A supposedly dead asset from Burry has been climbing all year
Azure ran V100s for 7.5 years before retiring them, Google still runs 7 to 8 year old TPUs in production. Old GPUs don't seem to die, they get demoted from training to inference and then continue earning cash
That's what Jensen showed the credit desks, and it changes everything, because an asset with real resale value can be financed more similar to something like an aircraft
Airlines lease planes instead of buying them because lenders trust the residual value. If GPUs work the same way, customers don't need equity to buy chips anymore, credit does it, and the pool of NVIDIA buyers expands massively
It looks like Jensen is going to be right about this (which makes sense, he is the King of GPUs) and $500 billion of the smartest credit money on earth too his side too
This is extremely bullish for NVIDIA of course, but also the hyperscalers and even neoclouds who are the main buyers/sellers of GPUs. The longer their assets retain value, the more they will buy and resell
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Good luck out there!
The market still does NOT understand the demand for compute (This is SO BULLISH)
GPU rental prices are supposed to FALL, not go up!
Even the A100, a 6 year old chip rents for 24% more than it did in January
Demand is bigger than people realize and this week proved it:
First, look at this chart if you haven't yet
B200s rented for $4.40/hr in January. They're $5.65 today, up 28% YTD. H100s went from $2.15 to $2.65. And H200s joined the index in May at $2.60 and haven't stopped climbing since, now $3.05
Used hardware repricing UP is the single cleanest signal that demand is outrunning supply (its insane)
Now combine that with what was said on the recent earnings calls:
SpaceX (Tuesday): signed $14.1B of new cloud compute deals in Q2 and another $6.7B in the first weeks of Q3. Their CFO says new compute capex pays for itself in under 1 year!!! And now their capacity is going from 2GW to "closer to 10 gigawatts than 5" by end of 2027
AMD (Tuesday): data center revenue more than DOUBLED YoY to $6.7B. Lisa Su called supply "tight due to unforecasted demand" and guided data center to more than double AGAIN in 2027, with OpenAI, Meta and Anthropic driving the ramp
Meta (last week): Zuckerberg said it clearly: "there's nowhere near enough compute for the demand"
And here's the part that matters most: all of this is BEFORE mass adoption of agents
A chatbot uses compute when a human types, whereas an agent runs 24/7! It's expected agents will consume 10-100x more tokens than humans... and we will eventually have alot more agents than humans!
The market continues to think that this demand will subside and capex will roll over, but they are wrong quarter after quarter. And anyone who listened to the earnings calls the last 2 weeks should understand that demand is growing not shrinking
NVIDIA and Semis sitting at a cheaper PE than before ChatGPT launched is INSANE. I'm super long multiple positions in semis as I think they need to be repriced much higher through the rest of the year
By the way, you can track my exactly portfolio in real-time inside Milk Road PRO. There are 4 other analysts sharing their portfolios and research inside as well.
You can try it out today for just $1 (so theres no risk). See my link in bio to learn more.
Good luck out there!
Aug 10, 2026 · 9:36 PM UTC
Milk Road PRO analysts were super early to $MU, $BE, $NBIS and many more assets in this bull market
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Burry is a useful idiot, he creates vol to buy low. Nvidia next earnings 26/8 will be big in every sense, in impact, earnings and RPO will be off the charts. Should keep the doomsters quiet for a day or two..
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They get money bc anthropic and open ai wants the as not enough new compute is coming on the market.
What happens when anthropic and open ai can't raise any more debt?
All this is about is getting those 2 money burning debt laden companies to ipo and dumping their toxic stock onto pension funds.
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So Elon makes his money back in one year and he gets permanent 100% additional first-year (bonus) depreciatio? So he will tap 5 or more years SPCX still has the secret sauce - the ~30-50% in longer-lived infrastructure (power delivery, transformers, cooling systems, building shell, etc.) that can largely stay in place.
You are not bullish enough! 🔥💥🚀🎯💯
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Excellent post.
A few common-sense observations:
1- Why would Michael Burry have better insight into the economic life and residual value of NVIDIA GPUs than Jensen Huang, the CEO of NVDA?
2- Knowingly making material false statements as the CEO of a public company can violate U.S. securities laws. Jensen’s view is supported by concrete evidence: A100s shipped in 2020 remain in active commercial use years later, older GPUs continue generating meaningful rental revenue (with prices for some generations rising rather than collapsing).
3- Hypersalers themselves use 5–6 year depreciation schedules based on their own experience. If the true useful life were only the 2–3 years as Burry claims, one would expect clearer public alignment from the companies that actually operate the hardware .
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I think the truth is somewhere in between. Every new GPU generation outperforms the previous one by roughly 5×. Yet the old GPUs aren’t simply phased out, and their rental economics don’t collapse anywhere close to that rate. H100s are now almost 4 years old and non of them is laid aside. They still rent for at least $3/hour today.
But I suspect the point being made from Burry’s thesis is that GPUs wear out economically in ~3 years, rather than becoming obsolete. That thesis doesn’t hold either.
However: with each generation delivering dramatically more compute per dollar and per watt, and the economic life being limited, you need a fast ROI before.
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@CarnivoreTradrZ
Z you have been saying the same thing all year yea I thought I was reading a Carnivore Market Wrap from February 2026
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