Michael Burry backs Ken Griffin's warning that GPU prices could crash on overcapacity
In brief
- Michael Burry publicly backed Ken Griffin's warning that GPU prices could collapse on overcapacity.
- Griffin likened GPUs to the 2000 telecom fiber-optic bubble and its unused "dark fiber."
- Hyperscalers' understated depreciation totals roughly $176 billion for 2026-2028, Burry estimates.
- The SOX index fell 11.4% in a week, its steepest drop since April 2025.
- BTIG analysts expect the semiconductor slump could stretch into 2027.
Griffin's dark fiber comparison
Griffin's main historical reference at the conference, as reported by Crypto Briefing, was the 2000 telecom fiber-optic bubble. That bust left behind what the industry called "dark fiber" (cable that was installed but never carried traffic). His concern is that GPUs could follow a similar arc, with surplus capacity crushing prices.
He also compared GPU supply dynamics to the airline industry. And he didn't hedge much on demand: Griffin said investors are "almost certainly" in an AI bubble when it comes to GPU demand.
He raised doubts, too, about how long older GPU models stay useful and whether earlier chips remain economically viable.
If supply does run ahead of demand, Griffin argued, GPU pricing could slide into free fall.
Burry's depreciation argument
Burry's endorsement came roughly a week after the conference, and it wasn't subtle.
"obvious to most with a working brain cell"
Michael Burry, as reported by Crypto Briefing
His own case goes beyond pricing. Burry argues the largest hyperscalers appear to be extending depreciation schedules on their hardware, and he puts the understated depreciation expenses at approximately $176 billion for 2026-2028. That's Burry's estimate, not a figure the companies have confirmed in the reporting.
He's also repeatedly warned about potential circular financing arrangements tied to hyperscalers' AI investments (again, his claim).
Chip stocks under pressure
Crypto Briefing also reported that the Philadelphia Semiconductor Index (SOX) dropped 11.4% in a single week. That was the index's steepest weekly decline since April 2025.
Analysts at BTIG expect the semiconductor slump could stretch into 2027.
So does today's GPU build-out end up looking like dark fiber? Griffin and Burry clearly think the risk is real, and they've said so in plain terms. Neither view is settled fact, though. They're the opinions of two well-known investors, and the chip market is now weighing them against BTIG's longer slump outlook.
Frequently asked questions
Why does Ken Griffin compare GPUs to the 2000 telecom bubble?
Griffin's main historical reference was the 2000 telecom fiber-optic bubble, which left behind "dark fiber," cable that was installed but never carried traffic. His concern is that GPUs could follow a similar arc, with surplus capacity crushing prices, according to Crypto Briefing.
What is Michael Burry's depreciation argument about hyperscalers?
Burry argues the largest hyperscalers appear to be extending depreciation schedules on their hardware. He estimates the understated depreciation expenses at approximately $176 billion for 2026-2028. That's his own estimate, as reported by Crypto Briefing.
