Nvidia’s Latest $2 Billion Deal: Defying Short Sellers or Digging a Deeper Hole?

31 minutes ago 1

Rich Duprey

Mon, December 1, 2025 astatine 9:37 AM CST 4 min read

Nvidia (NVDA) invested $2B successful Synopsys (SNPS) to fortify its spot improvement proviso concatenation contempt increasing scrutiny implicit circular financing allegations.
Michael Burry argues Nvidia mirrors Cisco during the dot-com bubble alternatively than Enron, and warns of a looming capex apocalypse.
Hyperscalers extended GPU depreciation to 4 to six years contempt Nvidia’s 12 to 18 period refresh cycles and this understates assemblage depreciation by $176B from 2026 to 2028.
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Nvidia (NASDAQ:NVDA) is facing intensifying scrutiny implicit allegations of circular financing successful its AI spot ecosystem. Critics assertion the institution engages successful a self-reinforcing loop: Nvidia invests successful customers similar CoreWeave (NASDAQ:CRWV) and privately-held Lambda, which past bargain much Nvidia GPUs utilizing that capital, artificially inflating sales. This echoes past concerns with stock-based compensation and spot depreciation practices that boost short-term revenues.

Nvidia has rebutted these claims arsenic misrepresentations, emphasizing determination is genuine request from hyperscalers. Yet captious voices are increasing louder, with abbreviated sellers informing of hidden risks spreading a contagion.

Undeterred, Nvidia is seemingly thumbing its chemoreceptor astatine critics, announcing this greeting a caller $2 cardinal concern successful spot decorator Synopsys (NASDAQ:SNPS), signaling assurance -- oregon possibly defiance -- successful deepening ties with its cardinal partners.

Michael Burry, famed for correctly calling the 2008 lodging crash, has besides pushed backmost connected fraud labels. He insists Nvidia isn't an Enron-style deception, but alternatively much intimately mirrors Cisco Systems (NASDAQ:CSCO) during the dot-com bubble days.

"I americium not claiming Nvidia is Enron," Burry precocious wrote connected his Cassandra Unchained Substack. It is intelligibly Cisco." He points to Nvidia's relation arsenic AI's "picks and shovels" provider. Like Cisco's 3,800% surge betwixt 1995 and 2000 -- which was followed by a 78% nonaccomplishment of worth -- Nvidia's hype-driven maturation risks overcapacity if AI request falters. Hyperscaler commitments for $3 trillion successful information halfway buildouts make "circular loops." Yet without overmuch end-user traction, a "capex apocalypse" looms.

Burry further exposes however Big Tech is artificially inflating profits by stretching the utile lives of the GPUs it buys from Nvidia. Hyperscalers similar Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) person softly extended the depreciation of the GPUs to 4 to six years, contempt Nvidia's "insane" 12- to 18-month refresh cycles -- specified arsenic Grace Blackwell successful 2024 and Rubin successful 2026. Instead of expanding lifespans, a much realistic estimation would beryllium a shortened 2 to 3 years.