NVDA Chip Obsolescence and AI Infrastructure Sustainability Analysis

November 22, 2025

A Reddit discussion [6] raised questions about the link between NVIDIA (NVDA) chip obsolescence and the potential bursting of the AI bubble. Key claims included AI companies inflating earnings via extended GPU depreciation schedules, yearly CapEx pressures from rapid obsolescence, and conflicting views on whether older GPUs can be reused for non-frontier workloads.

a.

: Conflicting data exists—some sources cite 2–3 years (leading to unsustainable CapEx [2]), while others argue older GPUs can be reused for inference workloads for 7–8 years [3].
b. : Big Tech’s AI CapEx jumped 75% YoY to $113.4 billion in Q3 2025 [4], with Amazon projecting $125 billion in 2025 AI infrastructure spending [5].
c. : The Technology sector underperformed (0.146% gain) relative to Healthcare (1.73%) and Industrials (1.52%) on November 22, 2025 [0], reflecting investor caution.
d. : Companies extending GPU depreciation schedules face regulatory and investor scrutiny [1], with Michael Burry criticizing Meta and Google for overstating GPU useful life [1].

• NVDA Dominance
  : NVDA’s data center segment accounts for 88.3% of revenue [0], but recent stock dips (-0.97% 1-day, -3.81% 5-day [0]) signal investor concerns.
• Analyst Sentiment
  : Consensus Buy (73.4% Buy ratings [0]) but 3.8% Sell ratings highlight obsolescence risks.
• Competitive Shifts
  : Obsolescence concerns may open opportunities for AMD/Intel to offer longer-lasting chips or alternative architectures.

a.

: AI firms shift older GPUs to inference workloads (e.g., content recommendation) [3].
b. : AI infrastructure investment moves from 5-year to yearly cycles [4].
c. : Regulators may increase scrutiny of GPU depreciation practices [1].

• AI Firms
  : Optimize GPU usage and adopt transparent depreciation policies.
• NVDA
  : Emphasize chip reuse and innovate to extend lifespan.
• Investors
  : Monitor CapEx growth vs. revenue and depreciation schedules [0].

1. GPU useful life (actual vs. reported)
2. CapEx sustainability
3. Depreciation transparency
4. NVDA’s innovation to address obsolescence