Catenaa, Sunday, May 24, 2026- The Big Short investor Michael Burry says that Nvidia quarterly earnings of $75.2 billion from the data center business may be the most dangerous kind of numbers there are.
In a May 2026 Substack post titled “The Heretic’s Guide to AI’s Stars Part III: Tracepalooza and the Bezzle,” Burry laid out his most specific argument yet against the AI infrastructure trade.
The post has been read by more than 200,000 subscribers, and the reaction from Wall Street was significant enough that Nvidia took the unusual step of sending a memo to sell-side analysts pushing back on its arguments on stock-based compensation and depreciation, according to CNBC.
Burry responded directly. “I stand by my analysis. I am not claiming Nvidia is Enron. It is clearly Cisco,” he wrote, CNBC confirmed.
“NVIDIA is benefitting from strong demand, but is selling into a concentrated set of buyers whose own demand is being distorted by a training and benchmarking phase that will not last,” Burry explained.
“That distorted demand is working like a bullwhip into NVIDIA’s own supply chain through custom supply commitments as well as downstream into data-center financing. Looming over it all is the bezzle, which once seen, cannot be unseen, and once revealed, does not exist.”
Burry is not making a general market argument. He is making a specific structural argument about Nvidia’s revenue concentration, supply chain obligations, and the nature of demand driving its numbers, according to 24/7 Wall St.
The first mechanism is buyer concentration. Hyperscalers, primarily Microsoft, Google, Amazon, and Meta, account for approximately 50% of Nvidia’s data center revenue. That concentration means a relatively small change in any one customer’s capital expenditure plans can produce an outsized revenue effect.
Burry has calculated that if Microsoft alone cuts its Nvidia chip spending by 20%, the revenue impact on Nvidia is approximately 4.2%, he noted on Substack.
The second mechanism is the bullwhip effect. When buyers at the end of a supply chain over-order because they fear missing out, that distortion amplifies backward through the chain.
Nvidia records record demand. It locks in custom supply commitments with TSMC, now totaling $119 billion in non-cancellable obligations. Data center financing expands to accommodate the buildout.
The entire chain bets that the demand is permanent. Burry argues that it is not.
The third mechanism is what he calls the bezzle, a term from economist John Kenneth Galbraith describing the gap between what people believe they own and what actually exists. In a bezzle, the money feels real, and the assets feel real, until suddenly they do not.
Burry is arguing that the current AI revenue flowing through Nvidia reflects a training and benchmarking phase of AI deployment that will eventually give way to an inference and deployment phase with a fundamentally different demand profile.
