Industry debate centers on GPU asset depreciation rates and potential impact on datacenter operator earnings and capital planning.

The debate over the depreciable lives of GPUs and data-center equipment has moved into mainstream scrutiny following Michael Burry's public criticism of Nvidia and major cloud providers, whom he argues are overstating earnings by depreciating AI hardware over unrealistically long periods. Between 2020 and 2024, many large technology companies steadily extended the useful lives of their servers and networking equipment. This trend diverged in 2025, when Amazon shortened the useful life of a subset of servers while Meta extended its estimate further. Nvidia has responded by pushing back on these critiques, arguing that customers consistently use four-to-six-year depreciable lives based on observed utilization and longevity, according to CNBC.

The financial implications of these depreciation assumptions are substantial and directly relevant to investors assessing corporate earnings. Burry has estimated that if major cloud providers shortened GPU lives from the four-to-six-year depreciation schedules currently used to something closer to the two-to-three-year hardware replacement cycle he believes reflects real-world economic life, the cumulative impact on reported earnings could exceed $176 billion for years 2026–2028. Even small changes in useful life assumptions may increase depreciation by billions of dollars per year for the largest companies, such as Amazon and Meta. With AI infrastructure now representing one of the fastest-growing spending categories, the accounting treatment of servers is directly relevant in understanding the depreciation expenses and the corresponding net income numbers.

A comprehensive analysis of these accounting considerations and disclosure nuances explores the detailed history of server and GPU useful-life changes across major hyperscalers, the GAAP mechanics behind those estimates, common myths highlighted by the Nvidia–Burry debate, and how accelerating AI hardware cycles and large construction-in-progress balances may shape future depreciation and reported earnings. Understanding these accounting treatments is essential before drawing conclusions about the impact of GPU depreciation lives on financial statements.