Nvidia Slaps Down Claim It's the Next Enron, but Bears Are Biting Back Hard[Stocks](https://moneymorning.com/category/article/stocks/) # Nvidia Slaps Down Claim It's the Next Enron, but Bears Are Biting Back Hard  by Rich Duprey  November 26, 2025  Share it: ## Is Nvidia the "Enron of AI?" Chipmaker Says No, But Big Shorts Disagree **Nvidia** ( [NVDA](https://moneymorning.com/stocks/nvda/)) has ridden the AI wave to stratospheric heights, with shares surging over 1,000% over the last three years to a $4.3 trillion valuation. Fueled by insatiable demand for its GPUs powering data centers and models like ChatGPT, Nvidia's revenue has exploded, with AI chip sales accelerating in 2025. Yet, beneath the glow, a storm is brewing. Prominent investors, echoing dot-com era fears, are wagering billions on a coming collapse. They allege opaque financing and inflated growth, – dubbing Nvidia the "Enron of AI." As short seller bets grow, the chip giant is facing a reckoning. ## Nvidia Fires Back Yesterday, Nvidia issued a pointed memo to Wall Street analysts, vehemently denying accusations of Enron-like vendor financing – deals where suppliers fund customers to inflate sales. The company likened the claims to discredited dot-com scandals, insisting its practices are transparent and robust. In the memo, Nvidia stated: "Unlike Lucent, Nvidia does not rely on vendor financing arrangements to grow revenue." It highlighted that customers settle invoices in just 53 days, far from the multi-year loans that doomed Enron and telecom giant Lucent. The firm emphasized: "Nvidia's business model is simple: we sell world-class products to customers who pay promptly." This rebuttal comes amid scrutiny over investments in AI startups like **CoreWeave** ( [CRWV](https://moneymorning.com/stocks/crwv/)), **OpenAI**, and **Anthropic**, which buy Nvidia chips but raise questions of circular financing. Nvidia affirmed these are minority stakes, not sales pumps, with no off-balance-sheet tricks.  ## Short Sellers Bite Back Undeterred, a cadre of legendary bears is doubling down. Michael Burry, the "Big Short" oracle who foresaw the 2008 housing crash, loaded up on NVDA put options recently before shutting **Scion Asset Management** – a final, ominous bet on downside. On X, Burry blasted Nvidia for "suspicious revenue recognition," tying it to customer investments that mask true demand. Jim Chanos – who predicted Enron's demise – echoes the alarm, calling Nvidia's deals "Lucent 2.0." In recent interviews, Chanos warned of off-balance-sheet debt flooding AI, with firms like **Meta Platforms** ( [META](https://moneymorning.com/stocks/meta/)) and **xAI** borrowing to buy chips – potentially leaving Nvidia exposed if hype fades. He holds a short position via options, according to regulatory filings. **Elliott Management**, the $70 billion activist investor powerhouse, has been betting against Nvidia all year, revealing put options with $600 million in NVDA downside exposure. Founder Paul Singer's team labeled AI "overhyped," Nvidia a "bubble" in client letters, and has avoided Magnificent Seven stocks outright. ## Beyond the Bears **SoftBank** dumped its entire 32.1 million-share NVDA stake in October, redirecting funds to OpenAI and **Arm Holdings** ( [ARM](https://moneymorning.com/stocks/arm/)). It downplayed it as "asset monetization," but the timing fueled bubble fears. Peter Thiel's **Founders Fund** also just disclosed it completely exited its NVDA position. As the divide between bulls and bears sharpens, investors need to decide for themselves if this is truly explosive, organic growth or an engineered illusion. It's never a good look when you have to declare you're not a crook, but letting unfounded allegations go unanswered could be even worse. **Beat the market, without relying on brokers or biased institutions.** Email(Required) X/Twitter This field is for validation purposes and should be left unchanged. Subscribe By submitting your email address, you will receive a free subscription to _Money Morning!_ and occasional special offers from us and our affiliates. 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