Quick Read
Burry warns NVDA revenue is majority circularly financed, while ORCL plans to raise $40B in debt to fund a $70B capex program.
PLTR trades at 148x trailing P/E and SOXX surged 74% YTD, metrics Burry says reflect an AI mania built on obscured leverage.
Data center construction kept accelerating even as rate-sensitive sectors fell 7.9% YoY, a divergence Burry says signals dangerous GDP dependency on AI spending.
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Michael Burry issued a fresh warning Friday that the AI data center boom mirrors the structural excesses that preceded 2008, arguing that circular financing, off-balance-sheet vehicles and captive insurers are quietly building leverage across the ecosystem. The investor behind the Big Short trade reportedly declared in a Substack post that “The shenanigans are apparent today for those that care to look.”
NVIDIA (NASDAQ:NVDA) stock is down 0.9% to $214.87 in Friday midday trading, its sixth straight losing session. Notably, Micron Technology (NASDAQ:MU) shares are falling 1% to $961.96, extending a pullback from record levels reached on HBM4 memory shipments.
Meanwhile, Oracle (NYSE:ORCL) stock is rising 3% to $146.81, one of several names Burry called out. Also, Palantir Technologies (NASDAQ:PLTR) shares are climbing 4% to $180.20 in a session shrugging off the Substack, while Nebius Group (NASDAQ:NBIS) stock is up 0.1% to $220.28. That’s just one day of share-price gains, but investors might wonder how Burry is justifying his cautionary tone.
Circular Financing at the Heart of the Warning
Burry’s central charge is that a growing share of NVIDIA’s future revenue is “majority financed in a circular arrangement” rather than pulled through by organic end-user demand. He points to special-purpose vehicles, off-balance-sheet financing and captive insurers as mechanisms that can absorb risky debt while making leverage harder to see from the outside.
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The pattern shows up at Oracle. In its Q4 FY26 report, Oracle disclosed remaining performance obligations of $638 billion, with $75 billion tied to bring-your-own-hardware or prepaid customer arrangements. Oracle also plans to raise $40 billion in debt and equity in fiscal 2027 to fund a $70 billion capex program, per its 8-K filing.
Nebius Group tells a similar story from the buyer side. The company’s disclosed capital stack (including NVIDIA pre-funded warrants, convertible debt and uncommenced lease obligations) reflects the sort of intertwined arrangements Burry says obscure true leverage.
