‘The Big Short’ investor issues a dire warning about Nvidia. Here’s why he believes an ‘aggressive fall’ is coming, and how businesses can avoid the same fate

Michael Burry, the investor whose controversial bet against the housing market was made famous in The Big Short, is continuing his campaign against another, perhaps even frothier target: Nvidia. Here’s why entrepreneurs outside the AI sector should still be taking note. In a pair of Substack posts he published on May 25 and May 22, Burry argues that the computer chip giant—both a driver of and a beneficiary from the ongoing artificial intelligence boom—is displaying ominous financial indicators and, he adds, seems primed for “an aggressive fall.” If the trajectory of the AI sector ends up looking anything like that of the 2008 financial crisis Burry successfully anticipated, it would be bad news for Nvidia, the wider tech sector, and in all likelihood, our entire economy. (Last year, as he ramped up his criticism of the company, Burry shorted Nvidia, which currently enjoys a market cap of over $5 trillion.) Yet Burry’s criticisms also offer a slate of lessons for business owners of smaller, less hyperscaled enterprises. Consider, for instance, Burry’s concerns with Nvidia’s consumer base. According to Business Insider, which reviewed the celebrity investor’s pair of new blog posts, Burry has deemed Nvidia’s customer concentration “off the charts,” noting that the tech giant’s recent earnings report indicated that its three most active customers account for 64% of its accounts receivable (up from 56% the prior quarter), and that its biggest customer now accounts for more accounts receivable but less revenue for the first time in over three years. “This is not quite a smoking gun,” Burry writes, “but more of a finding of a finger on the trigger.” It’s a good reminder for entrepreneurs in other industries that high customer concentration can put you at risk—and, consequently, make investors suspicious. After all, having a few big “whales” may bring in a lot of money, but relying on their business too much can come back to bite you if one of them slips your grasp. In hi