Over the past two years, tech giants Amazon, Alphabet, and Microsoft have invested nearly $3 trillion in AI infrastructure, with Microsoft planning $80 billion in capex by 2025, Alphabet raising its guidance to $75 billion, and Amazon’s AWS expected to hit $100+ billion annually by 2026. However, investor Michael Burry warns of a potential accounting issue in which companies are under-depreciating assets like servers and GPUs, inflating profits at the expense of future writedowns. Burry’s analysis suggests that extending asset lives could lead to significant earnings reductions in the future, impacting tech companies like Nvidia, Microsoft, Alphabet, and Amazon. This could result in a market correction when the issue comes to light.

Read more at Yahoo Finance: Michael Burry Just Exposed How Big Tech Is Inflating AI Profits