Michael Burry, famed for calling the subprime crisis, is warning that the AI boom is being propped up by a web of purchase commitments and cross-investments that route through Nvidia, inflating reported sales while draining cash. A Bloomberg map he cited tallies roughly $879 billion of multi‑year commitments and $46 billion of equity stakes among hyperscalers and model labs, with Nvidia at the center, even as five hyperscalers carry an estimated $1.65 trillion in off‑balance‑sheet obligations. Credit markets are reacting: Nvidia’s CDS spreads have doubled in two months, suggesting rising concern about counterparty and demand risk. The Bank for International Settlements recently cautioned that AI buildouts are outpacing balance sheets, while richly valued, unprofitable model developers like OpenAI and Anthropic depend on continued funding to buy more chips. Nvidia’s Jensen Huang has dismissed the “circular financing” label as misguided, but Burry argues the same dollar can appear as revenue at multiple links in the chain, leaving investors exposed if spending slows.
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