In the high-stakes world of artificial intelligence, a web of interconnected investments is raising eyebrows among investors and analysts. Major players like Nvidia, OpenAI, Microsoft, and AMD are pouring billions into one another, creating what some call a ‘circular economy’ of funding that underpins the sector’s explosive growth. This intricate dance of deals has propelled AI valuations into the stratosphere, but it also sparks concerns about sustainability and potential bubbles.

Recent reports highlight how these circular arrangements work: A company invests in a startup, which then spends heavily on the investor’s products, boosting revenues in a self-reinforcing loop. For instance, Nvidia’s chips power much of the AI infrastructure, and its investments in AI firms ensure a steady demand for those very chips. According to NBC News, a spate of deals among AI giants has tightened this circle, potentially amplifying risks if one link weakens.

Unraveling the Investment Web

Noah Smith, in his blog post on Noahpinion, questions whether we should worry about these circular deals, noting that AI companies are borrowing more to invest in AI itself. This echoes sentiments in a Yahoo Finance article, which warns that weak links could cripple the industry, given the interdependencies among Nvidia, OpenAI, and AMD.

Bloomberg delves deeper, reporting on OpenAI’s deals with Nvidia and AMD that boost the $1 trillion AI boom through these circular transactions. As detailed in the Bloomberg feature, a wave of partnerships is escalating concerns that the boom is propped up by interconnected business ties, where money flows in loops that may not reflect true market demand.

Risks of Overreliance

Axios explores why Big Tech’s ‘circular funding’ for AI could become the new business normal, with firms like Nvidia, Microsoft, Meta, and Amazon investing billions in startups. The Axios article points out that this strategy tightens control over the ecosystem but raises questions about long-term viability.

Asia Times echoes this caution, stating in their piece that it’s time to worry about AI’s circular deals. The Asia Times analysis discusses the possibility of a bust in the AI sector, highlighting how these deals form a web that could unravel if hype outpaces real-world applications.

Recent Escalations in AI Spending

More recent news from November 2025 shows the frenzy continuing. Forbes reports that OpenAI has signed a $38 billion cloud deal with Amazon, part of a broader AI spending acceleration anticipated to reach half a trillion dollars globally by 2026. As per the Forbes article, this underscores the massive expenditures fueling the circular money flow.

The Guardian examines the mind-boggling valuations of AI companies, citing a string of deals worth nearly $600 billion. In the Guardian piece, analysts grapple with the scale, questioning if these valuations are sustainable amid circular investments.

Investor Warnings and Market Sentiment

Morningstar UK warns that the AI spending spree could spell trouble for investors, drawing historical parallels to overinvestment in tech bubbles. The Morningstar analysis highlights risks of shrinking returns as Big Tech pours trillions into infrastructure.

Seeking Alpha compares Alphabet and Meta’s strategies in AI circular financing, noting their capital expenditure approaches and positioning. According to the Seeking Alpha report, Meta and Alphabet are vying for dominance in this looped investment landscape.

Insights from Social Media Buzz

Posts on X reflect growing sentiment around AI’s financial intricacies. Users discuss how AI agents could disrupt traditional banking by automating money movements, potentially eroding profits, as seen in posts highlighting McKinsey’s warning of $170 billion in lost bank profits due to ‘agentic AI.’

Other X discussions touch on AI’s role in money laundering detection and predictive financial analysis, but the core buzz centers on the circular economy of AI deals, with users debating if it’s a revolutionary model or a house of cards.

Historical Parallels and Future Implications

Drawing from past tech booms, experts like those quoted in Outlook Business warn of a potential AI bubble. The Outlook Business explainer details how Nvidia, OpenAI, and hyperscalers are weaving trillion-dollar deals that spark debate over sustainability.

The Register describes AI’s trillion-dollar deal wheel bubbling around Nvidia and OpenAI, emphasizing the cycle: invest in customers, then sell them stuff. As per the Register feature, this model builds a massive industry but invites scrutiny on its foundations.

Voices from Industry Leaders

In a TechCrunch video, experts dissect the ‘circular money problem’ at the heart of AI’s biggest deals, noting how funds recycle within a closed loop of tech giants. The TechCrunch analysis features commentary on how this setup amplifies growth but masks underlying risks.

Ellevest’s market insights question recent investment patterns among tech giants, labeling them as ‘circular investments.’ The Ellevest piece published five days ago underscores investor skepticism as they examine these loops.

Navigating the Path Ahead

As AI continues to evolve, the circular money dynamic remains a double-edged sword—driving innovation while courting volatility. Analysts from various publications urge vigilance, suggesting diversified strategies to mitigate risks in this interconnected web.

With global AI expenditures soaring, the industry’s insiders must weigh the benefits of these deals against the perils of overdependence, shaping the future of technology investment.