Jim Chanos: The Fall of Tech Body Shops

When it comes to spotting market illusions, Jim Chanos has made a career out of betting against them. Speaking at the 2025 Forbes Iconoclast Summit, the legendary short-seller didn’t hold back.

“It’s been a great day for you. Given what’s going on with Tesla. I know you’re short Tesla.” His response: “Yeah, as I posted earlier, you know, to quote my favorite Simpsons character, comic book guy, most predictable breakup ever.”

But the real highlight came when Chanos unveiled a fresh target: Carvana. “We put out something earlier in the week on an old name of ours. So most of the people in this crowd I suspect are, would be very excited to find the next hundred bagger. So what we did was look for something that was already up 100 times and revisit it.”

He wasn’t shy about his reasoning. “The Street believes it’s an epic turnaround, and we’ve been pointing out that, in fact, the company is still losing money. X gain on sale of loans.” More pointedly: “It’s selling subprime loans to both affiliates and non-affiliates and booking big gains on that, representing 122% in the latest quarter of their income.”

According to Chanos, “The insiders have begun to sell in an absolute torrent of stock. And it’s not just the Garcias the chairman and his son, the CEO, but it’s pretty much the C-suite are getting out seemingly as fast as they can.”

While the bulls argue Carvana is gaining share, Chanos offered a sharp rebuke: “It’s trading at 4 to 5 x. The valuations of its peers… Carvana is making all its money in finance, not selling the cars.” Asked to characterize it directly, he said: “It’s a subprime lender.”

Beyond autos, Chanos has his sights on broader systemic shifts. “We think there’s a number of companies that kind of pop up that are going to be roadkill on the AI highway.” He warned about firms riding the AI wave undeservedly: “There are a lot of companies who have business models that… are going to see them dramatically deflate because of the capabilities of AI.”

One example: IBM. “It’s a body shop.” He explained, “There would be no growth at IBM if it wasn’t for acquisitions… a lot of IBM’s customers are basically still using COBOL.”

And the bigger worry? “Everyone was told to go into STEM and learn to program, and in fact, those might be the jobs most at risk.”

You can watch the interview here: