Investment manager Jim Chanos is the founder of Kynikos Associates, a New York City-registered investment advisor focused on short selling. He is best known for predicting the fall of the maj
Investment manager Jim Chanos is the founder of Kynikos Associates, a New York City-registered investment advisor focused on short selling.
He is best known for predicting the fall of the major energy company Enron before its bankruptcy in 2001, with Kynikos profiting from its massive short position.
Jim Chanos, founder and president of Kynikos Associates LP, speaks at the Skybridge Alternatives (SALT) conference in Las Vegas, Nevada, U.S., on Thursday, May 18, 2017. Getty Images
The trade turned Chanos into a legendary figure at Wall Street. The investor just now sent a harsh warning on artificial intelligence (AI) trends.
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IREN Limited (Nasdaq: IREN) is a data infrastructure company that began as a Bitcoin miner. But it began focusing on building AI capacities, though mining is still a major business area.
The company's co-CEO Daniel Roberts recently said that the "bear case" of AI data centers getting rebuilt in 10 years doesn't apply to his company. He expects IREN AI data centers to get faster and cheaper to build over time.
The next center improves on the previous one's design instead of starting from scratch, he argued.
Cryptocurrency mining rigs at a facility in Buenos Aires, Argentina, on Monday, Dec. 2, 2024.Chanos said the bear case is that even if the GPUs deployed in these data centers last a decade, the "business is still uneconomic."
As per Chanos, the returns generated by these GPUs over 10 years wouldn't even meet the acquisition cost.
This is not the “bear case” on AI data centers…and he knows it. It’s that even when using 10 year depreciation on the GPU’s inside the data centers…the business is still uneconomic(returns below cost of capital). $IREN$CRWV$NBIShttps://t.co/9Fsd7PT3ca
— James Chanos (@RealJimChanos) September 10, 2026
In his post, the veteran investor not only tagged IREN but also CoreWeave (Nasdaq: CRWV) and Nebius Group (Nasdaq: NBIS).
Like IREN, Coreweave was also a crypto miner but later completely pivoted to AI. Nebius is a native AI company.
While crypto mining remained a very profitable venture for years, the lower prices, higher power costs, and reduced rewards over the past few years made it far less profitable.
The AI boom offered exactly the escape these companies were looking for. They realized that they have a ready data infrastructure to pivot from crypto mining to AI operations and took no time to make the transition.
While mining remains a minor business for these companies, AI is their main forte now.
Notably, all three companies have partnerships with NVIDIA Corporation (Nasdaq: NVDA), the chipmaker that has become the world's most valuable company due to the AI boom.
Companies like IREN and Coreweave buy or rent NVIDIA's AI-powered GPUs and build data centers using them. Later, these companies rent out their facilities to clients like AI labs and hyperscalers.
But Chanos is very skeptical of this business model and has raised concerns over chip economics and aggressive depreciation schedules.
As the NVIDIA CEO Jensen Huang recently claimed that the AI firm's compute is a "fungible, durable, highly rentable, productive and revenue-generating asset," Chanos asked him why NVIDIA itself isn't renting out its compute capacities.
I am skeptical of the companies buying $NVDA GPU’s to rent them out, not the company selling them (who should be charging more).
— James Chanos (@RealJimChanos) September 8, 2026
He expressed his skepticism of other companies like IREN buying NVIDIA's GPUs to rent them out, instead of the $5 trillion AI giant itself directly selling its products to end clients.
Related: Roundtable 100 analysts put Nvidia at No. 76 in new tech power ranking
