STORY · SELSKAPER_
Nvidia's $750 billion in deals raises fears of circular AI financing
Nvidia has signed deals totaling $750 billion, raising questions about circular financing in the AI industry. The pattern involves large companies buying AI infrastructure from each other in a self-reinforcing loop that may not reflect actual demand from end users.
WHY IT MATTERS
Circular financing can indicate that the AI investment wave is partly driven by companies financing each other to maintain high valuations, rather than by genuine business results. This increases the risk of a correction when the market realizes the underlying value creation doesn't hold up.
SOURCES
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