NVIDIA Accounting Allegations: Memo Refutation, Market Volatility, and Burry's Claims Analysis

NVIDIA’s private memo to analysts refutes Michael Burry’s claims about understated depreciation and circular financing [6]. Burry alleges NVIDIA uses investments in AI startups (e.g., xAI) to create artificial revenue [1], while NVIDIA’s earnings call defended its practices, noting 6-year-old GPUs are still in use [2]. Market reaction included a 7.81% drop on 11/20 (linked to Burry’s allegations) and a 1.7% gain on 11/24 (rumors of relaxed China chip exports) [0]. Reddit comments show mixed views: some call Burry a grifter [6], others question the memo’s framing [6].

1. Cross-Domain Link
   : Burry’s put position ($180M+ notional, strike $140) correlates with market volatility [1].
2. Sector Contagion Risk
   : Burry’s comparison to Enron’s SPVs raises concerns about AI sector accounting practices [4].
3. Information Asymmetry
   : The private memo’s partial disclosure creates uncertainty about NVIDIA’s full refutation [6].

1. Regulatory Scrutiny
   : Burry’s allegations could trigger investigations if proven true [4].
2. Market Volatility
   : NVDA’s recent price swings indicate investor uncertainty [0].
3. Sector Contagion
   : AI sector peers may face similar scrutiny [4].

• Confidence Boost
  : Successful refutation of claims could strengthen NVIDIA’s market position [2].

• Burry’s Position
  : Put options with $180M+ notional, strike $140 (March 2026) [1].
• Financial Metrics
  : NVDA’s DSO (53 days vs historical avg46), inventory growth (32% QoQ) [1].
• Market Data
  : 3-day trading volume exceeded 934M shares [0].
• Gaps
  : Full memo content, circular financing details, recent financial indicators [3].