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Major tech firms use circular financing to fund AI growth

Microsoft, Amazon, Google and Nvidia are using a circular financing model where suppliers invest in customers who then buy their products.

Who's paying whom? The circular money machine behind the AI boom (or bubble)
File photo Who's paying whom? The circular money machine behind the AI boom (or bubble) Photo: Phys.org

Investors fund their own buyers

A central bank analysis found that 55.2 percent of investments in AI firms came from other companies within the same sector. This method allows a supplier to act as an investor and customer simultaneously while reporting growth on both sides of the transaction.

Nvidia supports OpenAI expansion

The chipmaker plans to invest 30 billion dollars in a private funding round for OpenAI. Nvidia also provided a guarantee worth up to 105 billion dollars for an OpenAI data center located in Ohio.

Market observers question demand

Analysts are unsure how much of the current boom is driven by real end-user demand versus internal company funding. The relationship between chipmakers and data center builders remains opaque to outside investors.

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