“The Big Short” investor Michael Burry has warned Nvidia about a major risk, following the $95 billion commitment. Burry has compared this massive investment to Cisco’s Dot-Com bubble peak in the 2000s. On Thursday, it was reported that Nvidia has increased its purchase obligations from $16.1 billion last year to $95.2 billion, according to Nvidia’s fiscal 2026 10-K.
$95 Billion Concern
Michael Burry’s prediction has sparked concern across the stock market, given his track record of identifying major financial collapses, including the 2008 housing crisis. In a recent post on his official Substack account, Cassandra Unchained, titled “Nvidia Ratchets Up the Risk,” Burry flagged the troubling jump in Nvidia’s commitments. With this surge, Nvidia’s current purchase obligations stand at $95.2 billion, part of a broader $117 billion in total supply-related commitments. Burry, who holds put options against Nvidia shares, has cautioned: “This is not business as usual. This is a risk. This new reality reflects a deliberate decision to lock up supply chain capacity further than Nvidia has ever done before.”
Burry further alleged that Nvidia has been forced to do this before the demand is known. NVIDIA’s primary supplier, TSMC (Taiwan Semiconductor Manufacturing Company), is demanding longer, non-cancellable contracts and upfront cash in exchange for the massive capacity needed for the “Rubin” and “Blackwell” chips. Burry also noted that the $117 billion in obligations match Nvidia’s annual operating cash flow, effectively staking the company’s liquidity on “future demand that hasn’t happened yet.”
The Cisco Parallel
Michael Burry’s comparison to Cisco Systems is currently rattling tech investors. In 2000, at the height of the dot-com bubble, Cisco was the most valuable company in the world. Amid the rapid adaptation of the internet in the late 90s, Cisco aggressively committed to long-term supply contracts to meet a projected 50% annual growth rate. When the bubble burst and demand evaporated, the company was forced to write off over $2 billion in unusable inventory, causing its stock price to plummet by more than 80%.
Burry is highlighting a haunting similarity between the current AI boom and the structural failures of the dot-com bubble. The 1990s saw investors bet on “infinite” internet growth, a trend mirrored in today’s AI boom. With Nvidia being the global AI bellwether, the “big short” is foreseeing that these $117 billion obligations could become the same “noose” that took down Cisco two decades ago.
The Rising Market Tensions
NVIDIA remains at the center of the ongoing AI boom, recently reporting record-breaking Q4 2026 revenue of $68.1 billion. However, the stock price has failed to show the same enthusiasm, retracing over 5%.
With Burry’s warning about the increased purchase obligations, the market is turning cautious. Nearly 50% of Nvidia’s Data Center revenue comes from the five hyperscalers – Microsoft, Google, Meta, Amazon, and Oracle. Even if one of these giants pulls back on capital expenditure (capex), Nvidia is legally stuck with $95 billion of hardware that they might not be able to sell at current margins.
