Photo by Jordan Harrison on Pexels

Nvidia is pushing back against accusations of accounting fraud that recently surfaced in a Substack post and from prominent short-seller Michael Burry. The company has directly addressed claims regarding its accounting methods and dealings with neocloud firms. Nvidia maintains it doesn’t employ special purpose entities to conceal debt or artificially inflate revenue. While acknowledging close ties with these companies, in which it both invests and acts as a major client, Nvidia insists these relationships, though potentially beneficial to its earnings, are entirely legitimate. Nvidia emphasizes the independence of these companies, stating it neither controls them nor provides their financing. Nevertheless, anxieties persist about a possible AI bubble and the potential ramifications for Nvidia should it deflate. This includes potential losses on investments and a surplus of chips hitting the market, forcing Nvidia to compete against a flood of used GPUs being sold at discounted prices.