Michael Burry Alleges Tech Giants Inflate Earnings Through Depreciation Practices

Investor Michael Burry has raised concerns that major technology companies are inflating their earnings by extending the depreciation periods of their computing assets.

In a recent social media post, Burry stated that "understating depreciation by extending useful life of assets artificially boosts earnings," describing it as "one of the more common frauds of the modern era."

He specifically targeted companies such as Meta Platforms, Alphabet, Oracle, Microsoft, and Amazon, alleging that they are depreciating their hardware over five to six years, whereas the rapid evolution of AI hardware suggests a shorter lifespan of two to three years.

Burry estimates that this practice could lead to an overstatement of earnings by approximately $176 billion between 2026 and 2028. He projects that by 2028, Oracle's profits could be inflated by about 27% and Meta's by 21%.

Despite these allegations, some industry leaders note that older AI hardware models, such as Nvidia's A100 chips launched in 2020, remain in use across data centers, indicating that not all equipment becomes obsolete quickly.

Burry has indicated that he will provide more detailed calculations later this month.