Michael Burry, famed for shorting the 2008 housing market, is now targeting a $5.4 billion GPU sale by Nvidia to a special-purpose vehicle called Valor, partially funded by Nvidia itself.
Nvidia sold over 100,000 GB200 GPUs to Valor, booking $5.4 billion in revenue. However, Nvidia also injected $1.9 billion of equity into Valor as a limited partner. Apollo arranged $3.5 billion in debt for Valor, which was securitized and sold to Athene, Apollo's insurance subsidiary, whose annuity holders include retirees.
The GPUs are leased to an xAI subsidiary under a five-year triple-net lease, keeping assets off both Nvidia's and xAI's balance sheets.
Burry's critique centers on round-tripped capital, concentration risk with a single customer-xAI-and technology obsolescence risk over the five-year lease. He also warns that retiree annuity payments are tied to this single-technology, single-customer asset structure.
Apollo has acknowledged its role in the deal. Burry notes no crypto involvement-this is about traditional private credit and AI infrastructure financing.
For Nvidia investors, the question is whether such transactions inflate revenue quality. For Athene's annuity holders, the exposure is real and concentrated.