Billionaire Chamath Palihapitiya pushes back on a controversial claim that hyperscalers are using accounting techniques to inflate their profitability.
Earlier this week, “Big Short” investor Michael Burry accused AI giants of committing modern-era fraud by extending the life cycle of AI chips and servers to understate depreciation and boost balance sheets.
According to Burry, hyperscalers will understate depreciation by $176 billion by 2026-2028.
But Palihapitiya says AI chips and servers have evolved over the past years, and it’s now justifiable for hyperscalers to extend their lifecycle. He also says Burry doesn’t have the technical knowledge to make a solid claim about the usefulness of AI hardware.
“The practical thing that’s happening that Michael is not technical enough to understand is that there are meaningful iterations in how kernels are working, in how the intention mechanisms of these models are being rewritten, in how people are swapping out HBM for SRAM in these designs, in how they’re building, in some cases, really huge [Silicon] dies, in some cases, much smaller chiplets.
All of this creates more and more utilization. So these things last longer, and they also need more. I think that in order to make these accusations, you need to have some modicum of technical grounding that I don’t think he has.”
The billionaire also believes that hyperscalers have working business models while holding many aces up their sleeves to resort to financial fraud.
“The business models of these companies are just far too good for them to get to the point of having exhausted every other operational tactic that then they have to cook the books. These are not the seven companies that are going to cook the books.”
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