Wall Street legendary short seller and "Enron terminator" Jim Chanos warned at a seminar today that amid the current AI capital expenditure frenzy, the market's main focus is where the profits are flowing.

There is currently a disconnect in profit accounting: companies selling "picks and shovels" (such as chip and data center equipment providers) are recognizing revenue and profits immediately, while the hyperscale cloud providers spending huge sums are capitalizing these costs. Chanos recalled the internet bubble period from 1998 to 2000, when S&P 500 operating profits grew by 30% in two years, but when order books collapsed in 2001 and depreciation costs continued to kick in, S&P 500 profits plunged by 40%.To be conservative, Chanos assumed a physical lifespan of 10 years for GPUs when building his model, but he still expressed doubts about downstream profitability. Chanos said: You need to be cautious—right now, the costs of buying chips and building data centers are recorded as "construction in progress." Once these assets go online and start depreciating, the impact on profits will be significant.Regarding the current hype around emerging cloud service providers (such as computing power rental platforms like CoreWeave), Chanos gave an extremely pessimistic assessment, believing this is essentially an unprofitable business model. Chanos stated bluntly: If you buy chips from NVIDIA, rent someone else's data center, and then sublease the computing power to Microsoft or Google, you're an equipment rental company—not a tech company, but a financial company.Chanos further pointed out: You should be long on the products made by chips, not the places where the chips are. He revealed the real return on invested capital (ROIC) for current computing infrastructure: the latest deal details show that if you have a data center with power supply and chips now, the expected pre-tax ROIC is only 5%, 6%, 7%, or 8%—all single digits. If this is the best you can do even in times of shortage, I'd rather hold other segments of the industry chain.