Michael Burry — Big Tech Inflating AI Profits via Chip Depreciation Extension
Published · Updated · By Investus editorial desk (SUNRYU Partners)
Michael Burry revealed an analysis that Big Tech companies are inflating AI profits by extending chip depreciation periods. Meta extended its schedule from 3 years to 5 years.
Burry's Core Argument
• Companies set chip depreciation schedules arbitrarily
• Longer schedule = lower annual depreciation → higher profit
• This is disconnected from how long chips actually work
Case Comparison
• Meta: 3 years (2020) → 5 years (2025) (extended)
→ lower depreciation expense, artificially boosted profits
• Amazon: opposite direction on same hardware
→ shortened schedule (reflects real usage cycle)
• Same chips, opposite policy = profits incomparable
Investor Impact
• Makes AI infrastructure earnings quality hard to compare
• Same valuation framework produces distortions
Counter-View
• If chips genuinely last longer, extended depreciation is justified
• Policy choice is within GAAP rules
Investor Checklist
• Compare depreciation policies directly across AI infrastructure peers
• Verify real earnings via cash flow (FCF) analysis
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Disclaimer
This article is editorial research for informational purposes only. It is not investment advice, a recommendation, or a solicitation to buy or sell any security, and does not guarantee any return. Markets carry risk of loss. Verify figures against the primary sources before making decisions.