By Theron Mohamed
Publication Date: 2026-02-26 15:08:00
Nvidia has put itself in a “risky position” to meet expected demand for its microchips, and could suffer a “catastrophic” blow to its finances if the AI boom wanes, Michael Burry says.
The investor of “The Big Short” fame wrote in a Substack post titled “Nvidia Ratchets Up the Risk” on Thursday that he’d spotted a “troubling” item in the company’s annual report: a 12-month surge in its purchase obligations from around $16 billion to $95 billion.
Burry said that was driven by key supplier TSMC insisting on lengthier contracts and cash in exchange for building out the capacity needed to build Nvidia’s newest chips.
“To be clear, NVDA has been forced to place non-cancellable purchase orders well before demand is known,” Burry wrote, adding that the company is taking longer to convert inventory into sales.
“This new reality reflects a deliberate decision to lock up supply chain capacity further than Nvidia has ever done before.”
