Monetary Matters with Jack Farley Breaking Down Michael Burry’s Big Nvidia Short Thesis and Open AI’s Massive Loss Projections | Jack & Max
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Nov 28, 2025 Michael Burry's bold short thesis on Nvidia takes center stage, sparking debates on the stock's viability. The hosts delve into HSBC's alarming projections for OpenAI, predicting massive losses ahead. They explore the cyclical nature of semiconductors and the potential pitfalls of AI investments. The implications of Burry's Substack success and its allure for investors are also unpacked. As the conversation unfolds, the impact of AI spending on GDP and upcoming Fed rate cuts adds further layers to this financial narrative.
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Depreciation Masks True AI Hardware Costs
- Michael Burry argues tech firms extend depreciation lives to mask true costs of AI compute hardware purchases.
- Jack Farley and Max note shorter real useful lives would make current earnings look overstated.
Short Companies That Misallocate AI Spend
- Consider shorting the companies that overpay for AI compute rather than Nvidia itself.
- Large hyperscalers can better absorb losses, making them harder shorts than smaller, overleveraged buyers.
Semiconductor Cyclicality Threatens Nvidia
- Semiconductors are historically cyclical and might revert from a perceived secular uptrend to normal cycles.
- If AI demand cools, Nvidia's valuation could suffer because its core business may be cyclical.