- Burry says Nvidia sold $5.4B in GPUs to a shell company, Valor, hiding chips off both balance sheets.
- Apollo packaged the $3.5B debt and sold it to Athene, which sells annuities to American retirees.
- Athene holds $103B in Level 3 assets with no market price under 16.6 times leverage in Bermuda.
Michael Burry, the investor who predicted the 2008 housing collapse, has published a detailed breakdown calling a $5.4 billion Nvidia GPU transaction deliberately engineered to make assets disappear across eight to twelve steps.
“It is all Fugazi,” Burry wrote, using his term for fake structure.
His target involves Nvidia, a shell company called Valor, Apollo Global Management, Athene Insurance, and Elon Musk’s xAI. Every step, Burry acknowledges, is technically legal and publicly disclosed. His argument is that the entire architecture was built to move credit risk off balance sheets and away from observable market pricing.
How It Works
Nvidia sold $5.4 billion worth of GB200 GPUs to Valor, a special-purpose vehicle with no operations. Nvidia also invested $1.9 billion directly into Valor. The 100,000-plus chips now sit physically inside xAI’s data center, powering Grok.
Valor holds legal title. The $5.4 billion in GPU assets does not appear on Nvidia’s balance sheet as inventory. It does not appear on xAI’s balance sheet as assets. Nvidia books the full amount as completed revenue. xAI gets full use of the chips. Risk sits in the shell company in the middle.
Valor needed $3.5 billion in financing. Apollo raised it, packaged it into debt securities, and sold those securities to Athene, its own insurance subsidiary. Athene sells annuities to ordinary American retirees as safe retirement savings products.
The Retiree Problem
The numbers inside Athene are the alarming part:
- $74.2 billion in reserves at Athene US
- $217 billion in assets transferred to a Bermuda captive insurer outside normal US regulation
- $103 billion, or 34.7% of the portfolio, classified as Level 3 assets with no observable market price
- 16.6 times leverage sitting on top of those unpriced assets
Who Benefits
Burry identifies four winners from the structure:
- Nvidia books $5.4 billion in revenue without inventory risk
- Apollo collects fees on $834 billion in private credit
- xAI gets computing power without owning the hardware
- Retirees at the bottom of a 16x leveraged Bermuda structure carry the risk without knowing it exists
Every step is legal. Every step is disclosed. Burry’s point is that legal and disclosed does not mean safe.
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