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Nvidia is working with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilize more than $500 billion in third-party capital.
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Burry’s criticism centers on the growing role of private credit in financing AI infrastructure.
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His concerns also reflect his broader argument that AI chips could depreciate faster than companies currently assume.
Michael Burry took aim at Nvidia’s newly announced $500 billion financing platform, stating that the structure just recreates the same risky debt dynamics that fueled the 2008 financial crisis, this time repackaged for the AI boom.
“That $500 billion NVDA Wall Street stunt involves Nvidia taking 25% stakes & providing residual value guarantees on purchase of its chips. All filtered through Private Equity’s Private Credit schemes,” Burry wrote. “I have an idea how that will look. Meet the new Boss. Same as the old Boss.”
NVDA stock edged 0.8% lower in pre-market trade amid strength in the broader market. On Stocktwits, retail sentiment around the AI bellwether dipped to ‘neutral’ from ‘bullish’ territory over the past day, and chatter dropped to ‘normal’ from ‘high’ levels.
What Is Nvidia’s $500 Billion Deal?
Nvidia announced Monday that it had signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilize more than $500 billion in third-party capital for AI infrastructure.
The platform is designed to finance projects including data centers, chip manufacturing facilities and power infrastructure, helping Nvidia customers fund the large upfront costs associated with expanding AI computing capacity.
The deal proposes that Nvidia could provide guarantees covering up to 25% of the residual value of its chips in individual financing transactions. The guarantees would be evaluated on a project-by-project basis and are intended to give lenders additional confidence in the future value of Nvidia’s GPUs.
The financial institutions would independently assess each project’s creditworthiness, while the capital would come from third-party investors rather than Nvidia’s balance sheet.
Why Michael Burry Is Focused On Private Credit
According to Burry, the $500 billion in capital is being funneled through private credit, an increasingly dominant but less regulated corner of finance that’s ballooned in recent years as banks pulled back from riskier lending.
