<\/p>\n
The scary part of a 30-year mortgage is rarely the payment. It is the roof that wears out while the loan still has decades to run.<\/p>\n
Michael Burry thinks Big Tech signed that kind of mortgage. In a Substack post on Thursday, September 24, 2026, the investor behind “The Big Short” said the write-offs could come in 2028 or 2029, when its AI commitments may be so large that “a relatively small write-off has a bigger impact than we can now imagine.”<\/p>\n
He floated 2028 as his base case in August, Benzinga reported. While hyperscalers like Microsoft and Alphabet are deeply exposed, Oracle Corporation (ORCL) sits squarely in the crosshairs of that timeline.<\/p>\n
Related: Oracle layoffs top 2,500 workers as AI spending surges<\/p>\n
Burry’s date comes from the capital cycle<\/p>\n
Net capital investment by S&P 500 companies, or capital spending minus depreciation, hit about 2.07% of GDP as of June 30, 2026, according to his post. Only the aftermath of the March 2000 Nasdaq peak ran higher in nearly four decades, he wrote.<\/p>\n
After the dot-com buildout, depreciation and write-downs kept S&P 500 net investment negative for 12 straight quarters, from mid-2003 to mid-2006, Burry wrote.<\/p>\n
Write-offs trail the peak in his framework, and he expects spending to keep climbing for a few more quarters.<\/p>\n
Among the world’s most profitable companies, Burry spares only Apple Inc. (AAPL). The rest are “betting everything on this as their free cash flow turns negative,” he wrote, while their borrowing accelerates.<\/p>\n
Money alone, he argued, buys no lasting edge. His other findings, per Stocktwits:<\/p>\n
Uncommenced leases nearly tripled to over $300 billion at Microsoft Corporation (MSFT), by Burry’s count, as it stretched data center useful lives to 25 years. He argued both moves shrink reported capital spending.<\/p>\n
Leases and purchase commitments rose 81% in nine months to about $267 billion at Amazon.com Inc. (AMZN), by his math, while long-term debt doubled to $128.9 billion.<\/p>\n
Roughly $700 billion in off-balance-sheet commitments sit at Meta Platforms Inc. (META), he estimated, backed by assets he says age faster than the telecom networks written down after 2000.<\/p>\n
Nearly $900 billion in commitments and exposures sit at Alphabet Inc. (GOOGL), he estimated, including circular deals that fund AI firms buying its computing power.<\/p>\n
Michael Burry sees hyperscaler write-offs arriving in 2028 or 2029, the same window in which Oracle’s Project Jupiter data center is due online.<\/p>\n
Mesut Dogan \/ Getty Images<\/p>\n
Why Oracle stock carries the sharpest version of the risk<\/p>\n
Oracle has turned from a database company into a landlord for AI computing, with $664 billion in contracted future revenue, according to CNBC. It also carries the most debt relative to earnings, about 4.3 times EBITDA versus under 1 times for the other four, according to Reuters.<\/p>\n
Burry targets the $11.4 billion in customer prepayments with “a significant financing component” Oracle collected last quarter, its 10-Q shows.<\/p>\n
Under accounting rule ASC 606, such early cash is treated like a customer loan, so Oracle books interest on it and later recognizes more revenue than it collected.<\/p>\n
That lifts future cloud revenue by nearly 20%, he argued: “the extra $1.9 billion becomes extra revenue created by the structure of the contract.” The offsetting cost lands in interest expense, so it never touches the operating margin, which CFO Hilary Maxson called central to Oracle’s value.<\/p>\n
In plain terms, treating prepayments as loans lets Oracle inflate reported future cloud growth while hiding the financing costs in interest expenses, keeping operational margins looking unnaturally clean.<\/p>\n
Oracle argues its chips age well. GPUs renewed or resold last quarter went for a 20% premium even though most were four years or older, co-CEO Clay Magouyrk said. “We see a long useful life with increasing value,” he added.<\/p>\n
Bulls, however, maintain that Burry underestimates persistent enterprise capacity shortages.<\/p>\n
Wall Street consensus points to Oracle’s soaring backlog and GPU premium pricing as proof that real-world AI workload demand will absorb these capital costs well before 2028 maturities hit.<\/p>\n
Oracle shares closed down 3.5% at $139.53 on September 24, 2026, according to The Motley Fool, as the cost of insuring its debt hit a record high. That sits below the $144.63 level where Burry disclosed an Oracle short position in August, so he profits if he is right.<\/p>\n
More Oracle:<\/p>\n
BofA reiterates buy on a cloud giant burning through cash<\/p>\n
Oracle sends another shocking message to employees<\/p>\n
Larry Ellison makes $7.5 billion surprise call on Oracle stock<\/p>\n
The 2028 bill may reach Oracle’s partners first<\/p>\n
Oracle’s roughly $248 billion in data center leases, disclosed in December 2025, start in fiscal 2028 and run for 15 to 19 years. Its customer contracts typically last about five years, S&P Global Market Intelligence told CoStar. That is the mortgage and the roof.<\/p>\n
At Project Jupiter, Oracle sent the Blue Owl Capital unit building its New Mexico campus a force majeure notice, which could allow Oracle to delay payments if the site misses its 2028 start, Bloomberg reported.<\/p>\n
Oracle said the project “remains on our planned schedule,” TechCrunch reported, but Blue Owl shares fell 4%.<\/p>\n
About $18 billion in Project Jupiter loans were quoted at 89 to 91 cents on the dollar, Reuters reported, citing the Financial Times.<\/p>\n
Magouyrk says Oracle’s growth capital need not all be Oracle’s own. Burry’s $3 trillion tally counts where it comes from instead: leases, guarantees and special-purpose vehicles.<\/p>\n
In the dot-com bust, Burry cites the damage that surfaced as write-downs. This time, the first warnings may be force majeure letters, stressed loans and delayed payments, well before any hyperscaler books a loss. Oracle’s October investor day is the next checkpoint.<\/p>\n
Related: Jim Cramer sends strong signal to Oracle stock investors<\/p>\n
#Michael #Burry #put #date #Big #Tech039s #reckoning #Oracle039s #billion #lands #crosshairs<\/p>\n","protected":false},"excerpt":{"rendered":"
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