- In 2019, Microsoft, Alphabet and Amazon wrote servers off over 3 years. By 2024, all three used 6. Meta now uses 5.5 and Oracle 6.
- Each extension lowered depreciation and raised profit. The companies' own 10-Ks put the first-year effect of the 12 extensions at $27.4 billion.
- Nvidia says it ships a new generation every year. A server placed in service in 2023 and depreciated over 6 years stays on the books through four Nvidia launches, with a fifth planned.
- Amazon is the only one to shorten. Microsoft's CEO said he did not want to be stuck with "four or five years of depreciation on one generation." Microsoft's books use six.
- None of this shows a misstatement. Useful life is an audited, disclosed estimate, and depreciation does not change cash.
Free download
The report and the data behind it
- The full report, 15 pages (PDF)
- The data workbook (Excel): every figure, the 10-K passages with links, and a model to test your own useful-life assumptions
The assumption
Servers now last twice as long, on paper
A company that buys a server spreads its cost over the years it expects to use it. That spread is depreciation. A longer expected life means a smaller charge each year, and a larger reported profit.
Every company here has lengthened that life since 2020, most of them more than once. Microsoft went from 3 years to 4 in 2020, then to 6 in 2022. Alphabet went from 3 to 4 in 2021, then to 6 in 2023. Amazon moved one year at a time: 4 in 2020, 5 in 2022, 6 in 2024.
Meta moved cohorts from 3 to 4 years before and during 2021 without dating each move. Oracle’s filings before fiscal 2023 give only a range of 1 to 5 years.
Show the data
| Company | Changes (effective) | Note |
|---|---|---|
| Microsoft | 3 yrs (2019) → 4 yrs (mid-2020) → 6 yrs (mid-2022) | Fiscal years begin July 1. |
| Alphabet | 3 yrs (2019) → 4 yrs (2021) → 6 yrs (2023) | |
| Amazon | 3 yrs (2019) → 4 yrs (2020) → 5 yrs (2022) → 6 yrs (2024); subset back to 5 (2025) | From 2025, a subset of servers and networking equipment moved back to 5 years; the rest stay at 6. |
| Meta | 3 yrs (2019) → 4 yrs (2021) → 4.5 yrs (mid-2022) → 5 yrs (mid-2022) → 5.5 yrs (2025) | Cohorts moved from 3 to 4 years before and during 2021; the filing does not date each move. Shown at 2021. |
| Oracle | 4 yrs (mid-2021) → 5 yrs (mid-2022) → 6 yrs (mid-2024) | Fiscal years begin June 1. Filings before fiscal 2023 give only a range of 1 to 5 years. |
| CoreWeave | 5 yrs (2022) → 6 yrs (2023) | Moved from 5 to 6 years effective January 1, 2023 (2025 10-K). |
What it was worth
$27.4 billion in the first year alone
When a company changes the estimate, it must disclose the effect. Every company here did. Added together, the first-year effects of the 12 extensions come to $27.4 billion.
That figure understates the total. Each change keeps lowering depreciation for years after the first, until the older servers are fully written off. It also spans six years, so it is not one year’s profit.
Show the data
| Company | Year | Change | As stated | Share of operating income |
|---|---|---|---|---|
| Microsoft | FY2021 (Jul 2020) | servers 3->4; network 2->4 | operating income +$2.7B; net income +$2.3B | 3.9% |
| Microsoft | FY2023 (Jul 2022) | servers and network 4->6 | operating income +$3.7B; net income +$3.0B | 4.2% |
| Alphabet | 2021 | servers 3->4; certain network 3->5 | depreciation -$2.6B; net income +$2.0B | 3.3% |
| Alphabet | 2023 | servers 4->6; certain network 5->6 | depreciation -$3.9B; net income +$3.0B | 4.6% |
| Amazon | 2020 | servers 3->4 | D&A -$2.7B; net income +$2.0B | 11.8% |
| Amazon | 2022 | servers 4->5; networking 5->6 | D&A -$3.6B; net loss reduced $2.8B | 29.4% |
| Amazon | 2024 | servers 5->6 | D&A -$3.2B; net income +$2.5B | 4.7% |
| Amazon | 2025 | subset of servers and networking 6->5 | D&A +$1.4B; net income -$1.0B | -1.8% |
| Meta | 2022 | most servers and network 4->4.5 (Q2) ->5 (Q4) | depreciation -$860M; net income +$693M | 3.0% |
| Meta | 2025 | most servers and network ->5.5 | depreciation -$2.92B; net income +$2.59B | 3.5% |
| Oracle | FY2023 | servers 4->5 | operating expenses -$434M | 3.3% |
| Oracle | FY2025 | servers and networking 5->6 | operating expenses -$733M; net income +$573M | 4.1% |
| CoreWeave | 2023 | data center computing equipment 5->6 | total expenses -$20M | n/a |
In most years the change was worth 3% to 5% of the company’s operating income. Amazon’s two early changes were worth more. In 2020 the longer life cut depreciation by $2.7 billion, equal to 11.8% of operating income. In 2022, a year Amazon reported a net loss, it cut depreciation by $3.6 billion. Operating income was $12.25 billion. Without the change it would have been about $8.65 billion.
The exception
Amazon went back
Effective January 1, 2025, Amazon moved a subset of its servers and networking equipment from 6 years to 5. Its 2025 10-K gives the reason: “the increased pace of technology development, particularly in the area of artificial intelligence and machine learning.” The change added $1.4 billion of depreciation in 2025 and cut net income by $1.0 billion.
No other company here has shortened. Meta lengthened again in the same month, to 5.5 years, cutting its 2025 depreciation by $2.92 billion. We found no further change in any 2026 10-Q filed by October 25, 2026.
The chip clock
Nvidia ships every year. The books assume six.
At Computex in June 2024, Jensen Huang said: “Our company has a one-year rhythm.” Nvidia’s own press releases bear that out. Since the H100 was announced in March 2022, Nvidia has announced the H200, Blackwell, Blackwell Ultra and Rubin, and has said Rubin Ultra systems will arrive in the second half of 2027.
Show the data
| Product | Announced |
|---|---|
| V100 (Volta) | 2017-05-10 |
| A100 (Ampere) | 2020-05-14 |
| H100 (Hopper) | 2022-03-22 |
| H200 | 2023-11-13 |
| Blackwell | 2024-03-18 |
| Blackwell Ultra | 2025-03-18 |
| Rubin | 2026-01-05 |
| Rubin Ultra (planned) | 2027-07-01 |
The tension shows up in Microsoft’s own words. Its books depreciate servers over up to 6 years. Its CEO describes the risk of being stuck with that schedule on one chip generation.
“I didn’t want to go get stuck for four or five years of depreciation on one generation.”
Satya Nadella, Microsoft CEO, Dwarkesh Podcast, November 12, 2025.
“One of the biggest learnings we had even with Nvidia is that their pace increased in terms of their migrations.”
Satya Nadella, same interview.
“The shorter useful lives are due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning.”
Amazon, 2025 Form 10-K.
The bill in the pipeline
Spending has run far ahead of depreciation
The five companies spent $464.6 billion on property and equipment in their latest fiscal year, up from $71.1 billion in fiscal 2019. Their depreciation in the latest year was $122.9 billion, 26% of that spending.
The gap is not all servers. Capital spending includes land and data center buildings, which depreciate over decades. But every server bought in 2025 and 2026 will reach the income statement over the next five or six years, and the length of that schedule decides how much lands each year.
Show the data
| Company | Fiscal year | Capex ($B) | Depreciation ($B) | Operating income ($B) |
|---|---|---|---|---|
| Microsoft | 2019 | 13.9 | 9.7 | 43.0 |
| Microsoft | 2020 | 15.4 | 10.7 | 53.0 |
| Microsoft | 2021 | 20.6 | 9.3 | 69.9 |
| Microsoft | 2022 | 23.9 | 12.6 | 83.4 |
| Microsoft | 2023 | 28.1 | 11.0 | 88.5 |
| Microsoft | 2024 | 44.5 | 15.2 | 109.4 |
| Microsoft | 2025 | 64.5 | 22.0 | 128.5 |
| Microsoft | 2026 | 116.0 | 34.3 | 155.2 |
| Alphabet | 2019 | 23.6 | 10.9 | 34.2 |
| Alphabet | 2020 | 22.3 | 12.9 | 41.2 |
| Alphabet | 2021 | 24.6 | 10.3 | 78.7 |
| Alphabet | 2022 | 31.5 | 13.5 | 74.8 |
| Alphabet | 2023 | 32.3 | 11.9 | 84.3 |
| Alphabet | 2024 | 52.5 | 15.3 | 112.4 |
| Alphabet | 2025 | 91.5 | 21.1 | 129.0 |
| Amazon | 2019 | 16.9 | 15.2 | 14.5 |
| Amazon | 2020 | 40.1 | 16.2 | 22.9 |
| Amazon | 2021 | 61.0 | 22.9 | 24.9 |
| Amazon | 2022 | 63.6 | 24.9 | 12.3 |
| Amazon | 2023 | 52.7 | 30.2 | 36.9 |
| Amazon | 2024 | 83.0 | 32.1 | 68.6 |
| Amazon | 2025 | 131.8 | 41.9 | 80.0 |
| Meta | 2019 | 15.1 | 5.2 | 24.0 |
| Meta | 2020 | 15.2 | 6.4 | 32.7 |
| Meta | 2021 | 18.7 | 7.6 | 46.8 |
| Meta | 2022 | 31.2 | 8.5 | 28.9 |
| Meta | 2023 | 27.1 | 11.0 | 46.8 |
| Meta | 2024 | 37.3 | 15.3 | 69.4 |
| Meta | 2025 | 69.7 | 18.0 | 83.3 |
| Oracle | 2019 | 1.7 | 1.2 | 13.5 |
| Oracle | 2020 | 1.6 | 1.4 | 13.9 |
| Oracle | 2021 | 2.1 | 1.5 | 15.2 |
| Oracle | 2022 | 4.5 | 2.0 | 10.9 |
| Oracle | 2023 | 8.7 | 2.5 | 13.1 |
| Oracle | 2024 | 6.9 | 3.1 | 15.3 |
| Oracle | 2025 | 21.2 | 3.9 | 17.7 |
| Oracle | 2026 | 55.7 | 7.6 | 20.6 |
The schedule also shows up in the depreciation line itself. Alphabet’s depreciation fell from $13.5 billion in 2022 to $11.9 billion in 2023, the year it moved servers from 4 years to 6, while its capital spending rose. Microsoft’s fell from $12.6 billion in fiscal 2022 to $11.0 billion in fiscal 2023, the year of its move to 6.
The sensitivity
What a 4-year life would cost
Four companies report their server balances separately. Applying a 4-year life to those balances gives a rough size for the assumption. This is arithmetic, not a forecast: the balances include servers already fully written off, and two of the lines include other equipment.
Show the data
| Company | Fiscal year | Gross balance ($B) | Current life (yrs) | Extra at 4 yrs ($B) | Share of op. income |
|---|---|---|---|---|---|
| Microsoft | FY2026 | 215.9 | 6 | 18.0 | 11.6% |
| Meta | 2025 | 98.0 | 5.5 | 6.7 | 8.0% |
| Amazon | 2025 | 172.5 | 5.5 | 11.8 | 14.7% |
| Oracle | FY2026 | 59.6 | 6 | 5.0 | 24.1% |
A smaller version of the same problem
What Hertz learned from its EVs
On January 11, 2024, Hertz told the SEC it would sell about 20,000 electric vehicles, a third of its global EV fleet. It recorded about $245 million of extra depreciation in the fourth quarter of 2023 to write the cars down from their book value to what they would sell for.
The mechanism carries over. A depreciation schedule sets book value. The market sets what the asset is worth. When the two drift apart, the gap arrives later as a single charge. For Hertz, it came when the company decided to sell. For a cloud provider, it would come when it retires a chip generation early.
The comparison has limits. Rental cars have a resale market with daily prices, so Hertz could see the gap. Data center GPUs have a thin one. Hertz’s filing also does not say why the cars were worth less.
The other side
The case for six years
- The companies give reasons. Microsoft cited “investments in software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology.” Amazon cited “continuous improvements in our hardware, software, and data center designs.” Meta cited “expected longer refresh cycles in our data centers.”
- Old chips still do work. A GPU too slow for training the newest models can still serve inference. Nvidia, in a memo to analysts published by Bernstein in November 2025, said customers depreciate its GPUs over four to six years based on real-world longevity and use, and that A100s from 2020 still hold meaningful value (as reported by Silicon UK, November 28, 2025). We have not seen the memo itself.
- “Servers” is not only GPUs. The policies cover CPUs, storage and networking too. No company reports a separate life for accelerators.
The evidence on wear
How long a GPU lasts is not public
No company here publishes retirement or failure rates for its accelerators. The largest public data point is Meta’s Llama 3 paper. During a 54-day stretch of training on up to 16,000 H100 GPUs, Meta recorded 419 unexpected interruptions. The paper attributes 58.7% of them to GPU issues. Faulty GPUs alone account for 148 of the 419.
That shows new GPUs fail often under heavy load. It says nothing about how many years a GPU stays useful, which is the question the schedules answer.
The claim in circulation
Michael Burry’s $176 billion
In November 2025, investor Michael Burry posted on X that the hyperscalers understate depreciation by about $176 billion over 2026 to 2028, and projected that Oracle’s and Meta’s 2028 earnings would be overstated by about 27% and 21% (as reported by Techstrong.ai, November 11, 2025).
We could not check his figure. His method is in a paid newsletter and is not in the coverage. The filings support his premise that lives have lengthened while chip generations have shortened. They do not show what the right life is, and they do not show fraud.
What this does not show
The limits
- It does not show that any company misstated its accounts. Useful life is a management estimate. Auditors review it, and every change here was disclosed.
- Depreciation does not change cash. The money for a server is spent when it is bought. Free cash flow is the same under any schedule.
- The $27.4 billion is first-year effects only, across 2020 to 2025. It is not one year’s total, and it is not the lifetime effect.
- The sensitivity in Figure 5 is arithmetic on reported balances, not an estimate of true lives.
- No company separates GPU lives from other servers.
For technology leaders
Questions this raises for your own budget
- What life does your finance team assume for your own GPU servers, and who chose it?
- If you reserve GPU capacity for several years, does the contract let you move to a newer generation, and at what price?
- If a provider retires a generation early, what happens to capacity you have reserved on it?
- In a build-or-rent comparison, does the build case use the provider’s 6 years or your own refresh cycle?
Free download
Get the report and the data
One request sends you a link to both files:
- The full report as a 15-page PDF, with every chart and its data table.
- The data workbook (Excel): every useful-life change with the 10-K passage and a link to the filing; capital spending, depreciation, revenue, operating income and cash flow for 2019 to the latest year; and a model where you change the useful life, for the five companies or for your own server spend, and see the depreciation.
Questions and answers
Server depreciation, briefly
What useful life do Microsoft, Alphabet and Amazon use for servers?
Microsoft and Alphabet depreciate servers over 6 years. Amazon uses 6 years for most servers and 5 years for a subset it moved back in 2025. All three used 3 years in 2019. Meta uses 5.5 years for most servers and network assets, Oracle 6 and CoreWeave 6.
How much did longer server lives add to Big Tech profits?
The companies' 10-Ks put the first-year effect of 12 extensions between 2020 and 2025 at $27.4 billion of lower depreciation or higher operating income. That counts only the first year of each change.
Has any company shortened its server life?
Amazon. Effective January 1, 2025, it moved a subset of servers and networking equipment from 6 years to 5, citing the increased pace of technology development in artificial intelligence and machine learning. The change added $1.4 billion of depreciation in 2025.
Does a longer depreciation schedule change cash flow?
No. Depreciation spreads the cost of equipment already paid for. It changes reported profit, not the cash spent.
How often does Nvidia release a new data center GPU generation?
Nvidia says it works on a one-year rhythm. Since the H100 was announced in March 2022 it has announced the H200, Blackwell, Blackwell Ultra and Rubin, with Rubin Ultra systems planned for the second half of 2027.
Method
How we did this
- We read 33 Form 10-K filings: Microsoft (fiscal 2021 to 2026), Alphabet (2019 to 2025), Amazon (2020 to 2025), Meta (2019 to 2025), Oracle (fiscal 2021 to 2026) and CoreWeave (2025), plus each company’s 2026 10-Qs filed by October 25, 2026.
- Useful lives and stated effects are quoted from the filings’ notes on accounting estimates.
- Capital spending, depreciation and operating income come from the SEC’s XBRL company facts. Capital spending is purchases of property and equipment (for Amazon, the purchases of productive assets it tags in XBRL, before incentives). Depreciation is depreciation of property and equipment.
- The share of operating income divides the stated first-year effect by that year’s reported operating income.
- Nvidia dates are the dates of Nvidia’s own announcements.
Data checked October 25, 2026. Filing links are in the source list.
Sources
- Microsoft, Alphabet, Amazon, Meta, Oracle and CoreWeave Form 10-K and 10-Q filings, SEC EDGAR: https://www.sec.gov/edgar/search/
- SEC XBRL company facts API: https://data.sec.gov/api/xbrl/companyfacts/
- Satya Nadella on the Dwarkesh Podcast, November 12, 2025: https://www.dwarkesh.com/p/satya-nadella-2
- Hertz Form 8-K, January 11, 2024: https://www.sec.gov/Archives/edgar/data/1657853/000165785324000010/htz-20240111.htm
- Nvidia, Computex 2024 keynote summary, June 2, 2024: https://blogs.nvidia.com/blog/computex-2024-jensen-huang/
- Nvidia, V100 (Volta), 2017-05-10: https://nvidianews.nvidia.com/news/nvidia-launches-revolutionary-volta-gpu-platform-fueling-next-era-of-ai-and-high-performance-computing
- Nvidia, A100 (Ampere), 2020-05-14: https://nvidianews.nvidia.com/news/nvidias-new-ampere-data-center-gpu-in-full-production
- Nvidia, H100 (Hopper), 2022-03-22: https://nvidianews.nvidia.com/news/nvidia-announces-hopper-architecture-the-next-generation-of-accelerated-computing
- Nvidia, H200, 2023-11-13: https://nvidianews.nvidia.com/news/nvidia-supercharges-hopper-the-worlds-leading-ai-computing-platform
- Nvidia, Blackwell, 2024-03-18: https://nvidianews.nvidia.com/news/nvidia-blackwell-platform-arrives-to-power-a-new-era-of-computing
- Nvidia, Blackwell Ultra, 2025-03-18: https://nvidianews.nvidia.com/news/nvidia-blackwell-ultra-ai-factory-platform-paves-way-for-age-of-ai-reasoning
- Nvidia, Rubin, 2026-01-05: https://nvidianews.nvidia.com/news/rubin-platform-ai-supercomputer
- Nvidia, Rubin Ultra (planned), 2027-07-01: https://blogs.nvidia.com/blog/nvidia-keynote-at-gtc-2025-ai-news-live-updates/
- Llama Team, Meta, “The Llama 3 Herd of Models,” section 3.3.4 and Table 5: https://arxiv.org/abs/2407.21783
- Silicon UK, “Nvidia Refutes Criticism In Memo To Analysts,” November 28, 2025: https://www.silicon.co.uk/e-innovation/artificial-intelligence/nvidia-ai-memo-627702
- Techstrong.ai, November 11, 2025: https://techstrong.ai/features/tech-investor-michael-burry-alleges-accounting-irregularities-at-hyperscalers-in-pursuit-of-ai-boom/