Nvidia and Michael Burry, the famed investor who was chronicled in “The Big Short” for spotting the subprime bubble, appear to be in a war of words.

According to Barron’s, Nvidia’s investor-relations team sent a memo to Wall Street analysts seeking to refute key points of Burry’s recent arguments against the graphics-chip maker, on topics ranging from the use of stock-based compensation to accounting. But it’s clearly the latter topic that has Nvidia on edge, alongside a perception that it’s engaged in vendor financing to make demand appear strong.

‘I am not claiming Nvidia is Enron. It is clearly Cisco.’

— Michael Burry

“NVIDIA does not resemble historical accounting frauds because NVIDIA’s underlying business is economically sound, our reporting is complete and transparent, and we care about our reputation for integrity,” the memo said, according to Barron’s. “Unlike Enron, NVIDIA does not use Special Purpose Entities to hide debt and inflate revenue.”

Burry, who has disclosed bets against Nvidia and Palantir via put contracts, isn’t backing down.

Don’t miss: They bet everything on Palantir and became millionaires. Inside the market’s ultimate cult stock.

“Nvidia emailed a memo to Wall Street sell side analysts to push back on my arguments on SBC and Depreciation. I stand by my analysis,” Burry said on his new — and wildly popular — Substack publication, Cassandra Unchained. “As well, I am not claiming Nvidia is Enron. It is clearly Cisco.”

Cisco

CSCO

-0.33% was not accused of accounting fraud, but it was briefly the world’s most valuable company during the dot-com bubble, a crown Nvidia wears today. Today Cisco, which like Nvidia provided the backbone of then-burgeoning new technology, still exists but as the 28th largest company in the S&P 500.

Nvidia’s stock

NVDA

+1.37% rose on Monday, but shares are down about 14% from their late October peak.

TECH STOCKS SUFFER WORST WEEK SINCE APRIL AFTER $800BN AI SELL-OFF

US companies closely tied to the artificial intelligence boom have lost close to $1tn in market value since last Friday in the worst week for tech stocks since President Donald Trump’s “liberation day” tariffs in April.

The combined market value of eight of the most valuable AI-related stocks — including Nvidia, Meta, Palantir and Oracle — has fallen by about $800bn since the end of last week.

The declines left the tech-heavy Nasdaq Composite with a weekly loss of 3 per cent, its worst five-day run since the index fell 10 per cent after Trump launched his trade war with a blitz of tariff announcements in April.

“AI-related capital expenditures are substantial, increasingly debt-financed, and reminiscent of the 2000 tech bubble’s frenzy of questionable investments,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers.

Four tech groups, Alphabet, Amazon, Meta and Google, last week reported a combined $112bn of capital expenditure in the third quarter. The sector is meanwhile borrowing hundreds of billions to fund its expansion in AI.

Amateur traders, who are notorious for buying most market dips, decided to stay on the sidelines this week, according to JPMorgan analysts.

Retail investors trimmed their positions in defence group Palantir following its earnings on Tuesday and took some profits on quantum computing stocks that have also surged this year, the bank said in a note to clients.

Concerns about sky-high valuations for Silicon Valley tech groups have collided this week with signs of weakness in the US labour market and waning consumer confidence in the world’s biggest economy.

The University of Michigan’s index of consumer sentiment fell to a three-year low in November.

The absence of key economic data caused by the longest-ever federal government shutdown, now stretching to 38 days, means investors are growing increasingly nervous that the labour market may have weakened substantially since late September.

“Perhaps the risk of a recession is creeping up under our noses,” said Mike Zigmont at Visdom Investment Group.

The Chicago Federal Reserve’s estimated hiring rate fell for the sixth consecutive month in October and investors have been spooked by a recent flurry of lay-offs announced by companies including Amazon, Paramount and Target.

“Hiring has been very weak. The [Federal Reserve] is behind the curve and needs to cut rates quicker,” said Stephen Yiu, chief investment officer of investment fund Blue Whale Growth, which has bet big on Nvidia.

“We don’t own the other members of the Magnificent Seven, I’m very concerned about them burning money to stay competitive,” he added.

Nvidia, the world’s most valuable company, has fallen the most in dollar terms over the week. Its market capitalisation declined by about $350bn, little more than a week since it became the first company ever to hit a $5tn valuation.

Microsoft, Oracle and Broadcom also lost ground during the week, although the market steadied at the end of trading on Friday.

Chief executive Jensen Huang told the Financial Times this week that he expected China was ultimately “going to win the AI race” against the US.

He subsequently tried to row back on the comments, saying that China was “nanoseconds behind America in AI”.

Huang on Friday signalled it was unlikely Nvidia would be able to sell a version of its latest Blackwell AI processors to Chinese customers. This would be a setback for the Silicon Valley chipmaker after hints from Trump in recent months that he might agree to such a plan.

This week’s debut of Beijing-based Moonshot AI’s Kimi K2 Thinking model, which reportedly cost less than $5mn to train, was hailed as the latest sign that Chinese competitors are narrowing the technical lead held by US developers.

The release of DeepSeek’s low-cost R1 model sparked a Wall Street panic in January that wiped $589bn from Nvidia’s market value in a single day.

“Is this another DeepSeek moment?” Thomas Wolf, co-founder of AI developer platform Hugging Face, said in a social media post about Kimi.

Comments this week by OpenAI’s finance chief Sarah Friar that the $500bn AI start-up might look to the US government to provide a funding “backstop” also triggered speculation about its finances.

The company has agreed $1.4tn in AI infrastructure commitments through an elaborate web of deals with chipmakers Nvidia, AMD and Broadcom, as well as cloud partnerships with Microsoft, Amazon and Google. These links mean that much of Big Tech’s expected growth in the coming years is now intertwined with OpenAI’s.

OpenAI’s chief executive Sam Altman sought to calm anxiety in a social media post on Thursday, saying the start-up does not want government guarantees, while predicting its revenue would “grow to hundreds of billion[s] by 2030”.