According to "Business Insider", Michael Burry, a well-known investor and the prototype of the movie "The Big Short", recently pointed the finger at Nvidia, questioning Nvidia's equity incentives, investments and accounting operations. Nvidia fired back. According to a written note Nvidia sent to a Wall Street analyst, the company responded to multiple recent criticisms and accusations against it and named Burry directly.

Equity incentive issues

In its note, Nvidia specifically cited a post that Burry made on X last week. The post stated that Nvidia’s equity incentives damaged shareholder value and “resulted in a 50% reduction in shareholder returns.”

"NVIDIA has repurchased $91 billion of stock since 2018, not $112.5 billion. Mr. Burry appears to have mistakenly included taxes on restricted stock units. Employee equity incentives should not be confused with the actual performance of the repurchase program. NVIDIA's employee compensation is consistent with its peers. The fact that employees benefit from the increase in stock price does not mean that the initial equity incentives issued were too high at the time," NVIDIA said.


Bury

Burry has attracted attention online recently for slamming Nvidia and expressing doubts about the sustainability of the AI ​​boom. He recently closed access to outside funding for his hedge fund Scion Asset Management and started a newsletter.


Bury says he stands by his analysis

Last Sunday, he opened a new Substack column "Cassandra Unchained" and continued to criticize Nvidia in his first article. He acknowledged in Monday’s

accounting fraud problem

In its note, Nvidia also responded to a number of other recent accusations about the AI ​​craze, including comparisons between the company and "famous accounting fraud cases in history" such as Enron, WorldCom and Lucent.

"NVIDIA bears no resemblance to historical accounting fraud because we have a financially sound underlying business, complete and transparent financial reporting, and have always valued our corporate reputation for integrity," NVIDIA said.

Revolving financing problem

Nvidia also responded to criticism about "circular financing" among AI companies.

"First of all, NVIDIA's strategic investments only account for a small part of the company's revenue, and they account for an even smaller proportion of the total annual financing of approximately US$1 trillion in the global private capital market. The revenue of companies in NVIDIA's strategic investment portfolio mainly comes from third-party customers, not NVIDIA itself." NVIDIA said.

Recently, the stock market's AI trading boom has subsided, with the most popular stocks falling due to investor concerns about valuations, circular trading, and concerns that high-end GPUs used in AI training produced by companies such as Nvidia may depreciate.

As of press time, Nvidia declined to comment.