Dr. Burry you are posting faster than I can read and absorb. I have so many readings still to go through. 🐌🐌🐌🐌🐌 I had to reread the heretics I and II before I deep dived into III. I only did a fast read of the heretic III before. I hope you take a break so I can catch up. Haha. But I have to say it is getting easier to read than few months back as I don't have to Google a lot of things now. Terms are slowly solidifying in long term memory bank.
Michael, apologies for posting this here. I've sent a couple emails regarding a subscription issue and would greatly appreciate it if you had a chance to take a look. Thank you SO much. 🙏
Haha. I can read faster. It won't register in the brain’s long term memory block. I have done some statistical analysis. So I can understand graphs/chart/trends/some terms. But business accounting and stock market analysis is new research area. It is getting better though.
This is a Scion Asset Management (Michael Burry) diagram titled "The Retiree/Apollo/Nvidia/Bermuda/AMAPS/xAI Pipeline" — essentially mapping out how retiree annuity money flows through a complex financial structure to fund xAI's GPU cluster.
The Flow, Step by Step
US Retirees buy Athene fixed/indexed annuities (marketed as "safe")
Athene US holds $74.2B in reserves, then cedes $217B in assets via Modified Coinsurance (ModCo) to Athene Annuity Re — a Bermuda captive insurer, moving the assets and risk offshore
Athene Annuity Re now sits at 16.6x leverage, with 34.7% of assets ($103B) classified as "Level 3" — meaning no market price, essentially illiquid and hard to value
Apollo (which owns Athene, $1.03T AUM) directs those captive Bermuda assets into AMAPS — Apollo Multi-Asset Prime Securities — its own credit/asset-backed finance vehicle
AMAPS raises $3.5B in debt + uses $1.9B equity from Nvidia to fund Valor (VCI), a $5.4B Special Purpose Vehicle
VCI buys Nvidia GB200 GPUs ($5.4B worth, 100,000+ chips) — chips only, no land, power, or cooling included
xAI leases the GPUs from VCI via a 5-year triple-net lease (xAI pays all running costs — power, cooling, maintenance)
Nvidia sells $5.4B in chips AND invests $1.9B as LP equity — effectively boosting its own revenue while getting an equity stake back
Burry's Critique
Retirees bear ultimate credit risk while Apollo collects fees at every layer
The structure moves credit risk off balance sheets and away from market pricing
Level 3 assets mean the risk is essentially invisible to regulators and the public
Every step is legal and disclosed — but the complexity obscures who ultimately bears the loss if xAI/Grok fails
It's Burry's argument that Wall Street has built a daisy chain connecting grandma's annuity to Elon Musk's GPU cluster.
If the NVDA/xAI/AMAPS deal collapses in the future, would not the retirees’ max liability be only $3.5B out of their $217B assets? Not to say that $3.5B is trivial but I just want to understand who is most at risk here and what the maximum damage could be. Would the entire $217B assets be at risk if there is default?
Michael, love the chart, extremely helpful! However, Sir, I thought it was a full article, i poured a cup of coffee, got a snack and got all set! LOL so sad... That's okay, I'll just do some of my homework from the latest additions to the swag50! :)
As a Dead fan, I absolutely love these graphs/charts. Like solving a puzzle. I might even do the same things I do before i listen to Dead to comprehend them better. 🍾💀⚡️🌲
Interesting structure. Two questions come to mind:
(1) Why is NVIDIA providing ~35% equity support for a vehicle purchasing NVIDIA GPUs? One-off strategic transaction or a template for future deployments?
(2) If the deal is “downside-protected,” what specific credit enhancements (including any recourse beyond the SPV) support the lease obligations, given the uncertain residual value and useful life of AI hardware?
It is the financing structure underneath the AI buildout. If AI infrastructure increasingly depends on private credit, annuity balance sheets, and off-market asset structures, then the bottleneck is no longer only chips or power.
It becomes duration, leverage, collateral quality, and who is left holding the risk when the capex cycle slows.
Dr. Burry you are posting faster than I can read and absorb. I have so many readings still to go through. 🐌🐌🐌🐌🐌 I had to reread the heretics I and II before I deep dived into III. I only did a fast read of the heretic III before. I hope you take a break so I can catch up. Haha. But I have to say it is getting easier to read than few months back as I don't have to Google a lot of things now. Terms are slowly solidifying in long term memory bank.
Thank you for reading and being here!
Michael, apologies for posting this here. I've sent a couple emails regarding a subscription issue and would greatly appreciate it if you had a chance to take a look. Thank you SO much. 🙏
I don't see the emails, but I have escalated this and it should be sorted soon.
Thank you very much. Can’t wait to get access!
jeje...Please read Faster...I just can't get enough.
Haha. I can read faster. It won't register in the brain’s long term memory block. I have done some statistical analysis. So I can understand graphs/chart/trends/some terms. But business accounting and stock market analysis is new research area. It is getting better though.
We might need, in all seriousness, a Heretics For Dummies.
Could call it Burning At The Stake
The visual is giving me a headache 🤕
So is the ai bubble 🫧
I think the color coding is phenomenal... Are you a heavy drinker?
I get about 10 glasses of water in everyday
Why not 11?
Gotta leave room
Where are you going?
urinate?
😂
I was after trying to read this graphic
See that's where I mess up sometimes too. You can't just try to read. You have to actually do it.
To buy more GME
This is a Scion Asset Management (Michael Burry) diagram titled "The Retiree/Apollo/Nvidia/Bermuda/AMAPS/xAI Pipeline" — essentially mapping out how retiree annuity money flows through a complex financial structure to fund xAI's GPU cluster.
The Flow, Step by Step
US Retirees buy Athene fixed/indexed annuities (marketed as "safe")
Athene US holds $74.2B in reserves, then cedes $217B in assets via Modified Coinsurance (ModCo) to Athene Annuity Re — a Bermuda captive insurer, moving the assets and risk offshore
Athene Annuity Re now sits at 16.6x leverage, with 34.7% of assets ($103B) classified as "Level 3" — meaning no market price, essentially illiquid and hard to value
Apollo (which owns Athene, $1.03T AUM) directs those captive Bermuda assets into AMAPS — Apollo Multi-Asset Prime Securities — its own credit/asset-backed finance vehicle
AMAPS raises $3.5B in debt + uses $1.9B equity from Nvidia to fund Valor (VCI), a $5.4B Special Purpose Vehicle
VCI buys Nvidia GB200 GPUs ($5.4B worth, 100,000+ chips) — chips only, no land, power, or cooling included
xAI leases the GPUs from VCI via a 5-year triple-net lease (xAI pays all running costs — power, cooling, maintenance)
Nvidia sells $5.4B in chips AND invests $1.9B as LP equity — effectively boosting its own revenue while getting an equity stake back
Burry's Critique
Retirees bear ultimate credit risk while Apollo collects fees at every layer
The structure moves credit risk off balance sheets and away from market pricing
Level 3 assets mean the risk is essentially invisible to regulators and the public
Every step is legal and disclosed — but the complexity obscures who ultimately bears the loss if xAI/Grok fails
It's Burry's argument that Wall Street has built a daisy chain connecting grandma's annuity to Elon Musk's GPU cluster.
Ran it thru Claude =-)
If the NVDA/xAI/AMAPS deal collapses in the future, would not the retirees’ max liability be only $3.5B out of their $217B assets? Not to say that $3.5B is trivial but I just want to understand who is most at risk here and what the maximum damage could be. Would the entire $217B assets be at risk if there is default?
Michael, love the chart, extremely helpful! However, Sir, I thought it was a full article, i poured a cup of coffee, got a snack and got all set! LOL so sad... That's okay, I'll just do some of my homework from the latest additions to the swag50! :)
I love the graphs but I can’t help but think about how my MDs would murder me if I put those in a deck 😂
Yep, I’d have been murdered infront of my peers if I’d whacked this in an IM
As a Dead fan, I absolutely love these graphs/charts. Like solving a puzzle. I might even do the same things I do before i listen to Dead to comprehend them better. 🍾💀⚡️🌲
💙⚡️❤️
Most illiquid bubble in history. 🍿
I think you are having entirely too much fun blowing on this house of cards.
I think Heretic's Guide to AI Stars is my favorite series 👏
Interesting structure. Two questions come to mind:
(1) Why is NVIDIA providing ~35% equity support for a vehicle purchasing NVIDIA GPUs? One-off strategic transaction or a template for future deployments?
(2) If the deal is “downside-protected,” what specific credit enhancements (including any recourse beyond the SPV) support the lease obligations, given the uncertain residual value and useful life of AI hardware?
Great insight. I particularly appreciate how you connect the financial architecture behind AI infrastructure. Looking forward to Part IV.
The visual is brilliant, self explanatory, and devastating.
The important part here is not just GPUs vs TPUs.
It is the financing structure underneath the AI buildout. If AI infrastructure increasingly depends on private credit, annuity balance sheets, and off-market asset structures, then the bottleneck is no longer only chips or power.
It becomes duration, leverage, collateral quality, and who is left holding the risk when the capex cycle slows.
🤣
This is crazy.
What is the advertised rationale - shelter liability? Taxes? Or it simply hide the weenie?
Waiting for the next to drop