David Z. Morris

Tech + Finance. Every fraudster lies to themself first.

Book: "Stealing the Future: SBF and Elite Fraud"

'Hardcore' - NYMag

X-Fortune, CoinDesk

PhD @uiowa

[David Z. Morris @davidzmorris]

It would appear Nvidia is literally doing an Enron.

Specifically, it has reinvented the Chewco Maneuver:

Create fake "third parties" to absorb unwanted liabilities, fund with your own capital to prime the pump, then get rubes (retirement funds) to eat the risk.

[Bull Theory @BullTheoryio]

🚨Michael Burry just said Elon Musk and Nvidia's deal is built on fake numbers.

Burry published a detailed breakdown calling the entire structure "Fugazi", his word for fake.

He is alleging that billions of dollars in Nvidia chips are being hidden off balance sheets, and that American retirees are unknowingly funding the whole thing.

Nvidia, the world's largest AI chip company sold $5.4 billion worth of its most advanced GPUs, the GB200, to a company called Valor.

Valor is not a real operating business. It is a special purpose vehicle, a shell company created specifically to hold these chips and nothing else. Nvidia also invested $1.9 billion of its own money directly into Valor on top of the sale.

Those 100,000+ chips are now physically inside xAI's data center. xAI is Elon Musk's artificial intelligence company, the one that builds Grok. xAI is using every single one of those chips right now to run its AI models.

But here is what Burry is flagging.

Neither Nvidia nor xAI owns those chips on paper. Valor, the shell company holds legal title. That means $5.4 billion in GPU assets do not show up on Nvidia's balance sheet as inventory.

They do not show up on xAI's balance sheet as assets. They are legally invisible to both companies.

Nvidia gets to book the $5.4 billion as a completed sale and record it as revenue. xAI gets full use of the chips without owning them. And the risk disappears into a shell company in the middle.

Now here is where American retirees enter the picture.

Valor needed $3.5 billion in debt to fund this structure. Apollo provided it. Apollo is one of the largest asset managers on earth with $1.03 trillion under management and $834 billion specifically in private credit.

Apollo raised the $3.5 billion, packaged it into debt securities, and sold those securities to Athene.

Athene is Apollo's own insurance company. It sells fixed and indexed annuities, retirement savings products, to ordinary Americans.

When a retiree buys an Athene annuity, they believe their money is sitting in safe, stable investments. That money is now inside a structure funding Elon Musk's AI data center.

The numbers inside Athene are most alarming.

Athene holds $74.2 billion in reserves. It has moved $217 billion in assets into a captive insurer based in Bermuda, meaning those assets sit outside normal US insurance regulation and oversight.

Of the entire portfolio, 34.7%, equal to $103 billion, is classified as Level 3 assets.

Level 3 is an accounting classification that means there is no observable market price for these assets. No outside party can independently verify what they are actually worth.

The leverage sitting on top of those unpriced assets is 16 times.

Burry's says:
Every step of this structure is technically legal and publicly disclosed. But the entire thing was deliberately engineered across 8 to 12 steps to move credit risk off balance sheets and away from any market pricing.

- Nvidia books the revenue.
- Apollo collects the fees.
- xAI gets the computing power.
- And retirees sitting at the bottom of a 16x leveraged Bermuda insurance structure, holding $103 billion in assets with no market price carry the risk without knowing it exists.

[Semper Vigilantes @SemperVigilant1]

It went from their entire corporate strategy two days ago to now just a "narrow KPI".

$STRC $MSTR

[K A L E O @CryptoKaleo]

Saylor just admitted to completely shifting the focus for Strategy.

He defended the weekend raise on a total assets per share basis instead of BTC Yield:

“when both assets are included, it was accretive”

That’s a huge departure after years of preaching BPS (Bitcoin per share) as the metric that matters.

MSTR’s premium (now trading ~1.35x NAV - the Bitcoin minus the ~$22.7B of debt and preferred ahead of it) has never been about a screenshot of the static balance sheet.

The market pays for future BPS growth and leverage.

The moment the standard becomes “current net assets per share,” a static pile should trade near 1x.

So he’s using NAV math to win this argument while the entire valuation rests on the BPS growth frame he’s stepping away from.

NAV defends the deal but condemns the premium.

BPS growth defends the premium but condemns the deal.

He can’t keep both.

[David Z. Morris @davidzmorris]

I love him so fucking much

[Michael Saylor @saylor]

The document you cite clearly states that BTC Yield is a narrow KPI used to assess per-share accretion solely as it pertains to bitcoin holdings. It is not a measure of financial performance, valuation, liquidity, ROI, book value, or stockholder return. Full financial analysis requires a more comprehensive review of our financial statements and SEC disclosures.

[David Z. Morris @davidzmorris]

@FreeSpeechBTC21 @hodlonaut A bit. Digesting it is very much on my to-do list.

[David Z. Morris @davidzmorris]

I'm only really now absorbing just how deeply the Bitcoin "Maximalist" community was captured by Michael Saylor while I was busy writing about SBF and Tornado Cash.

Absolutely gobsmacking, a truly unparalleled fall from grace.

[David Z. Morris @davidzmorris]

Some people will just never see it, the way not everyone can see the image in a magic eye poster.

But once you see it, you can't unsee it

[David Z. Morris @davidzmorris]

@drjasper_eth Well, like a 2% repeg, it was all the way down to $92.

So all they have to do is sell more ... wait a second

[Silicon Valley Fodder @Playerinthgame]

Yup. Leaving his fan base holding the bag, Musk demanded that 30% of available SPCX be made available to retail (out of the ~4.2% sliver of the company he’s making available) when it’s usually 5% to 10%.

[David Z. Morris @davidzmorris]

@ToxiKat27 Fun

[saywhat @Ys0Complicated]

@davidzmorris @mattkratter I’m a Bitcoiner - STRC is not for Bitcoiners.
Hope that helps ✌️

[David Z. Morris @davidzmorris]

@austincampbell They've got so many solutions!

[David Z. Morris @davidzmorris]

The part of the $strc unwind we haven't seen yet is when Saylor has to raise the yield directly to retake the $100 'peg.'

He has to do this to avoid serious civil litigation - he compared it to a mmarket/savings.

But it would also accelerate the spiral trap he's in.

[David Z. Morris @davidzmorris]

@drjasper_eth Well, like a 2% repeg, it was all the way down to $92.

So all they have to do is sell more ... wait a second

[David Z. Morris @davidzmorris]

Pretty crazy coincidence Charles took a vacation from Twitter the day before this dropped

[masato_alexander @masatoalexander]

A May '25 tweet claims @IOHK_Charles sold ~1.5B ADA in the '21 hype cycle, plus 10x 20M payments to @gavofyork.

Rather than take its word, i wanted to check the chain.

Tracing funds is hard, but those x10 20M payments are a solid place to start:

🧵👇

https://t.co/X5vtdke3KQ

[GrapheneOS @GrapheneOS]

Apple and Google are gradually expanding their use of hardware-based attestation. They're convincing a growing number of services to adopt it. Google's Play Integrity API and Apple's App Attest API are very similar. Apple brought it to the web via Privacy Pass, which Google intends on doing too.

Google's Play Integrity API requires hardware attestation for the strong integrity level and is gradually phasing in requiring it for the more commonly used device integrity level. Apple already has it as a requirement. Over the long term, this will increasingly lock out hardware and OS competition.

The purpose of these systems is disallowing people from using hardware and software not approved by Apple or Google. This is wrongly presented as being a security feature. Banks and government services are the main ones adopting it but Apple and Google are encouraging every service to use it.

Apple's Privacy Pass brought hardware attestation to the web to help with passing captchas on their own hardware. Many people saw that as harmless since few sites would be willing to lock out non-Apple-hardware users. Apple and Google are both likely to bring broader hardware attestation to the web.

Google's reCAPTCHA is planning an approach where they use Privacy Pass on Apple hardware, their own approach on Google Mobile Services Android devices and a QR code scanning system to require an iOS or Google certified Android device for Windows and other systems:

https://t.co/7rQnioRa8A

Banking and government services increasingly require using a mobile app where they can use attestation to force using an Apple or Google approved device and OS. Apple's privacy pass, Google's 'cancelled' Web Environment Integrity and now reCAPTCHA Mobile Verification are bringing this to the web.

Current media coverage for reCAPTCHA Mobile Verification misunderstands it and the impact of it. They're bringing a hardware attestation requirement to Windows, desktop Linux, OpenBSD, etc. by requiring a QR scan from a certified smartphone to pass reCAPTCHA in some cases. They could expand it more.

Control over reCAPTCHA puts Google in a position where they can require having either iOS or a certified Android device to use an enormous amount of the web. Google defines certification requirements for Android which includes forcing bundling Google Chrome, etc. It's enormously anti-competitive.

Google's Play Integrity API bans using GrapheneOS despite it being far more secure than anything they permit. It also bans using any other alternative. This isn't somehow specific to an AOSP-based OS. You can't avoid this by using a mobile OS based on FreeBSD instead. You'll just be more locked out.

Google's Play Integrity API permits devices with no security patches for 10 years. The device integrity level can be bypassed via spoofing but they can detect it quite well and block it once it starts being done at scale. The strong integrity level requires leaked keys from TEEs/SEs to bypass it.

It doesn't provide a useful security feature, but it does lock out competition very well. Services requiring Apple App Attest or Google Play Integrity are primarily helping to lock in Apple and Google having a duopoly for mobile devices. Play Integrity is more relevant due to AOSP being open source.

Governments are increasingly mandating using Apple's App Attest and Google's Play Integrity for not only their own services but also commercial services. The EU is leading the charge of making these requirements for digital payments, ID, age verification, etc. Many EU government apps require them.

Instead of governments stopping Apple and Google from engaging in egregiously anti-competitive behavior, they're directly participating in locking out competition via their own services. Requiring people to have an Apple device or Google-certified Android device is anti-competition, not security.

reCAPTCHA Mobile Verification will currently work with sandboxed Google Play on GrapheneOS but it clearly exists to provide a way for them to start using hardware attestation on systems without it. People without an iOS or Android device will be locked out when this is required even without that.

This isn't about security or any missing functionality. GrapheneOS can be verified via hardware attestation. Google bans using GrapheneOS for Play Integrity because we don't license Google Mobile Services and conform to anti-competitive rules already found to be illegal in South Korea and elsewhere.

Services shouldn't ban people from using arbitrary hardware and operating systems in the first place. Google's security excuse is clearly bogus when they permit devices with no patches for 10 years but not a much more secure OS. It's for enforcing their monopolies via GMS licensing, that's all.

[Signal @signalapp]

Our statement on the UK government’s demand that all content on all devices sold or used in the country be scanned, on the presumption of nudity, using a dystopian combination of age verification and content scanning. This proposal will not safeguard children. It endangers us all.

https://t.co/VdWe9uhi8p

[David Z. Morris @davidzmorris]

The most "not a serious country" an unserious country has ever been

[Mullvad.net @mullvadnet]

This is what the UK spyware proposal means.

There must be government spyware on every mobile device. It shall watch everything that happens, including always watching the screen, looking for things the government disapproves of.

When anything is flagged by the software as something the government doesn't like, the software must block it from being sent or displayed (in realtime).

The user of the device must not be able to shut this watching and blocking off. The only way to shut it off would be to ask the government or its proxies to do so for you, at their discretion.

Therefore the whole device must be locked down. Administrator rights and the decision of what software or operating system to run or not to run must be taken from the owner/user and handed to the government and its proxies.

Apple and Google are themselves working hard to lock down the devices they are involved in to shut out competition and establish a duopoly.

The UK government says it is "working closely" with Apple and Google and currently they synchronise and coordinate their communication on this subject.

The UK government is now proposing to mandate what would otherwise be illegal anti-competitive practices.

@GrapheneOS on the Apple and Google duopoly:
https://t.co/rbRmcUDTRu

Statement from @signalapp
https://t.co/vJILcSrs4s

@ReclaimTheNetHQ on the state spyware:
https://t.co/3FCi06bP77

The government announcement:
https://t.co/ynYjR3DIRo

[David Z. Morris @davidzmorris]

@xflnow_ incredible level of demand for this lol

[David Z. Morris @davidzmorris]

@LowryLetter @CorySwan It's starting to feel like all the smart people went to ETH, even if just for the intellectual scene/challenges

[LowryLetter @LowryLetter]

@CorySwan @davidzmorris It is wild to me that the newbs know Saylor but don't know who Andreas Antonopoulos is

[David Z. Morris @davidzmorris]

@Ys0Complicated @mattkratter Hopefully you took the no-risk short option known as "not buying"

[David Z. Morris @davidzmorris]

They totally broke the thesis for cash and $STRC is still only at $95

lol, lmao

[Proof of Work Maxi @proofofworkmaxi]

@davidzmorris it's a money-mark-to-market fund

[David Z. Morris @davidzmorris]

@proofofworkmaxi 🥲

[𝙶𝙶 @ggcripto]

@davidzmorris 83% of STRC holders are retail. Probably cheaper to let it go to 0