Michael Burry argues that AI chip prices aren't falling as expected because power infrastructure, not chip performance, is the real bottleneck. H100 GPU rental prices rose 36% year-over-year despite newer chips arriving, while utility interconnection queues average seven-year waits. Wall Street's depreciation models miss this entirely, leaving trillions at stake.
So everybody keeps talking about how AI chips are about to be worthless. Then a 3-year-old chip got 36% more expensive to rent, and both of those cannot be true. If you've been hearing all of the news, Nvidia actually shipped a brand new chip every single year. It's one, it's called Hopper in 2022. Then we had Blackwell in 2024, Rubin this year. These are all AI chips. So the old ones became junk, right? That's the whole bear case. Michael Burry, the Big Short guy, built an entire argument about all of this and has been going on the internet about it. But you have to actually look at the rental market. SemiAnalysis tracks what it costs to rent an H100. That's the chip from 2023, the old one, the one that's supposed to be on its way to scrap heap. May 2025, it rented for about $1.95 an hour. May 2026, $2.65 while 2 newer generations were actually shipping. In my opinion, that's exactly what scarcity looks like. So why is a 3-year-old chip harder to get right now? Because you can't actually plug the newer AI chips into the system right now. To connect a big facility to get an actual power grid in America, you actually have to get in line. In Virginia, the main utility has 70 gigawatts of projects currently waiting right now. They connect about 10 large customers a year. The average wait is 7 years to get into the power grid. And even after you get permission, you need an actual transformer. That's the box that turns the grid power into actual building power. The wait on those has been running over 2 years. So here's the thing that everybody's missing. A chip does not lose its value when a better chip comes out. It loses its value the day that somebody can fill that same megawatt with something more profitable. And right now nobody can do that. So the old stuff keeps earning, which means this whole depreciation argument right now that Wall Street— isn't really about chips at all. It's actually about electricity. They're arguing about the wrong thing, and trillions of dollars is sitting on this answer. Nobody's connecting these dots. By the way, if you want to know how I make money off of all of this information, We have automatic AI trading bots that buy, sell, and do the research for you. We give it away for a dollar. Go to the link in my bio and take advantage.
