David Sacks

And let's assume they're making 70 billion in CapEx this year.

That CapEx does not get deducted from their operating profit when they report earnings.

That CapEx does not get deducted from their operating profit when they report earnings.

you take the 70 billion and you divide it by what's called its useful life, and you report that every year.

you take the 70 billion and you divide it by what's called its useful life, and you report that every year.

So if you do it over three years, to your point, it's about 24 billion a year, versus six years, it's 12 billion a year.

So if you do it over three years, to your point, it's about 24 billion a year, versus six years, it's 12 billion a year.

So that would impact the operating profit by on the order of, call it 10%,

So that would impact the operating profit by on the order of, call it 10%,

if the difference between three and six years.

if the difference between three and six years.

And so what Michael Burry is saying is that all of these hyperscalers have extended their depreciation schedule or the useful life of their data centers by roughly two X, which cuts the operating costs in half when they report it in earnings.

And so what Michael Burry is saying is that all of these hyperscalers have extended their depreciation schedule or the useful life of their data centers by roughly two X, which cuts the operating costs in half when they report it in earnings.

And so it's making their earnings inflate.

And so it's making their earnings inflate.

So he's claiming they're cooking the books.

So he's claiming they're cooking the books.

But if you go back to the chart that you showed, or I could just speak to this, Google first made this change in Q1 of 21, where they said the servers are now going from three to four years.

But if you go back to the chart that you showed, or I could just speak to this, Google first made this change in Q1 of 21, where they said the servers are now going from three to four years.

The chart shows the combination of servers and networking equipment.