Meta’s reported profits might be misleading because of how it accounts for depreciation on its capital base. James Chanos pointed out that Meta’s $210 billion capital base as of June 30, 2025, is depreciated over 11 to 12 years. The real economic life of the GPUs it relies on could be as short as 2 to 3 years. Last year, depreciation averaged 10 years on a smaller capital base, meaning Meta is actually extending depreciation as it spends more. The company also delays depreciating chips that have been bought but are not yet “in service,” which further inflates profits. Chanos says Meta’s financial statements no longer reflect the real shift in its business model, especially with an expected $100 billion capital expenditure in 2026.
“It looks like $META’s depreciable life on its capital base ($210B at 6/30/25) was 11-12 years, as of the 2Q. If the true economic life on its GPUs is actually 2-3 years, most of its ‘profits’ are materially overstated.”
It looks like $META’s depreciable life on its capital base ($210B at 6/30/25) was 11-12 years, as of the 2Q. If the true economic life on its GPU’s is actually 2-3 years, most of its “profits” are materially overstated. pic.twitter.com/pqhqxjI7Un
— James Chanos (@RealJimChanos) July 30, 2025
This problem isn’t unique to Meta. The SEC’s leniency toward companies like CoreWeave in misstating GPU useful life sets a dangerous precedent. Hyperscale tech firms now use these relaxed rules to mask the risks of massive investments, making them look safer to investors than they really are.