Core Viewpoint - The article discusses the ongoing debate surrounding Nvidia, particularly in response to criticisms from Michael Burry regarding the company's financial practices and the sustainability of its AI-driven growth cycle [3][4]. Group 1: Nvidia's Response to Criticism - Nvidia's CEO Jensen Huang and CFO Colette Kress defended the company's position during a recent earnings call, asserting that Nvidia is experiencing a positive cycle in AI development [3]. - Nvidia refuted claims about the short lifespan of its chips, stating that chips produced six years ago are still operating at full capacity [3][6]. - In a memo, Nvidia emphasized that its strategic investments account for a minimal portion of its revenue and that the majority of income comes from third-party customers rather than direct sales [5]. Group 2: Michael Burry's Critique - Michael Burry criticized Nvidia's financial practices, suggesting that the company's revenue recognition methods are questionable and could be perceived as fraudulent in the future [4]. - Burry highlighted that Nvidia has generated approximately $205 billion in net profits and $188 billion in free cash flow since early 2018, but stock buybacks have diluted shareholder value by 50% [5]. - He argued that the actual demand for Nvidia's products is minimal, with most customers relying on dealer financing [4]. Group 3: Financial Health and Chip Longevity - Nvidia countered Burry's claims about stock buybacks, clarifying that it has repurchased $91 billion worth of stock since 2018, not $112.5 billion as Burry suggested [5]. - The company asserted that its financial reporting is transparent and that it maintains a strong economic foundation, differentiating itself from companies involved in past accounting scandals [6]. - Nvidia also addressed concerns about chip longevity, explaining that while older chips may still be in use, this does not necessarily equate to profitability, as the cost of operating older models can be significantly higher [6].