By Rishabh Mishra
Publication Date: 2025-12-17 00:31:00
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Legendary short-seller Jim Chanos is sounding the alarm on the AI infrastructure boom, warning that a critical accounting oversight regarding Nvidia Corp. (NASDAQ:NVDA) chips creates a “massive financial risk” for the sector’s aggressive spenders.
In a recent podcast interview, Chanos argued that data center operators, specifically Oracle Corp. (NYSE:ORCL) and “neocloud” provider CoreWeave Inc. (NASDAQ:CRWV), are overstating their future profitability by relying on unrealistic depreciation schedules for their artificial intelligence (AI) hardware.
The core of Chanos’ bearish thesis is the estimated lifespan of the graphics processing units (GPUs) powering the AI revolution.
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While hyperscalers and neoclouds typically depreciate these expensive assets over six years, Chanos contends that the relentless pace of Nvidia’s innovation renders them obsolete much faster.
He noted that rental rates for Nvidia’s “Hopper” chips have already plummeted roughly 28% year-over-year as newer models enter the market. If the useful economic life of a chip is closer to three or four years rather than six, companies must drastically increase their annual depreciation expenses, which would crush reported earnings.