Michael Burry Just Called Nvidia’s SpaceX Chip Deal ‘Fugazi.’ Here’s Why It All Seems Wrong

1 hour ago 2

Rich Duprey

Mon, June 1, 2026 astatine 10:45 AM CDT 6 min read

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Nvidia (NVDA) booked $5.4B successful gross from selling GB200 GPUs to Valor Compute Infrastructure, which past leased them to xAI, with Nvidia itself investing $1.9B arsenic an anchor equity spouse successful the structure, allowing some companies to debar equilibrium expanse interaction portion capturing upside. Apollo Global Management (APO) provided $3.5B successful indebtedness financing routed done security affiliate Athene, which holds $74.2B successful U.S. reserves but shifted $217B into a Bermuda captive insurer with 34.7% successful Level 3 illiquid assets and 16x leverage, yet exposing retail annuity holders to concentrated recognition risk.
Michael Burry warns that multi-layered AI infrastructure financing structures, portion legal, obscure existent economical risks down analyzable arrangements akin to Cisco’s dot-com epoch accounting, arsenic these deals multiply crossed the AI buildout and could amplify losses if request weakens oregon hardware becomes obsolete.
The expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks. Get them present FREE.

Investors person watched Nvidia (NASDAQ:NVDA) thrust the AI question to bonzer heights, with information halfway gross exploding successful caller years. Yet amid the hype, 1 of Wall Street's sharpest skeptics keeps raising reddish flags astir its financing arrangements.

Michael Burry, the capitalist who foresaw the 2008 lodging crisis, took to his Cassandra Unchained Substack and X to statement a large Nvidia spot transaction with xAI "fugazi" -- his word for thing fake oregon contrived.

But is it arsenic overmuch of a interest arsenic Burry contends, oregon overmuch ado astir nothing?

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks. Get them present FREE.

The Deal That Sparked the Critique

In January 2026, Valor Equity Partners -- a longtime backer of Elon Musk’s ventures -- raised $5.4 cardinal done a caller entity called Valor Compute Infrastructure (VCI). The wealth funded the acquisition of thousands of Nvidia’s almighty GB200 GPUs positive supporting information halfway equipment. These chips were past leased, nether a triple-net lease structure, to a subsidiary of Elon Musk’s xAI for grooming its Grok AI models astatine 1 of the world’s astir almighty compute clusters.

Apollo Global Management (NYSE: APO) funds led $3.5 cardinal of the financing, providing indebtedness superior successful a woody designed to beryllium downside-protected. Nvidia itself stepped successful arsenic an anchor constricted partner, investing astir $1.9 cardinal successful equity alongside different organization investors.

This setup fto xAI summation contiguous entree to cutting-edge hardware without booking the afloat multi-billion-dollar acquisition connected its ain equilibrium sheet. Instead, VCI owns the assets legally, and xAI pays ongoing lease and operating expenses implicit time. Nvidia, meanwhile, recorded the afloat $5.4 cardinal arsenic gross close away.

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