Citadel founder Ken Griffin warned that GPU prices could collapse if supply exceeds demand, comparing the current situation to the 2000 telecom fiber-optic bubble. Griffin expressed concerns regarding the long-term economic viability of older GPU models as technology advances rapidly.
Investor Michael Burry supported Griffin's assessment on October 26, 2026. Burry claims that major hyperscalers are extending hardware depreciation schedules despite the rapid obsolescence of chips. He estimates these understated depreciation expenses at approximately $176 billion for 2026–2028.
The Philadelphia Semiconductor Index (SOX) declined by 11.4% in one week, marking its steepest drop since April 2025. Analysts at BTIG suggest that the semiconductor market slump could persist into 2027.
Burry also highlighted concerns regarding potential circular financing arrangements linked to AI investments by hyperscalers. Market observers are now focusing on capital expenditure guidance and earnings reports to assess the validity of these warnings.
