I prefer https://www.bloomberg.com/news/features/2025-10-07/openai-s-... which shows the circularity in the deals.

A stronger counterpoint to the circular deals suggestion is at the end of the article, which reads

> Michael Intrator, CoreWeave’s CEO, acknowledged the circular financing worries in a recent interview with Bloomberg News, but said the public concerns will dissipate as more businesses adopt AI.

> “When Microsoft comes to us to buy infrastructure to deliver to its clients who are consuming 365 or Copilot, I don't care what the narrative is about circular financing,” Intrator said. “They have end users that are consuming it.”

It's on you to decide then if end users are actually getting value / paying for AI products.

https://openai.com/es-419/index/openai-nvidia-systems-partne...

OpenAI => nVidia => OpenAI. That's pretty circular.

In the end with most of these deals its the shareholders paying through market cap dilution. Given the current market structure (the big companies are tech companies) there's PLENTY of capital for OpenAI to fund their expansion.

They've discovered a cheat code IMO. Instead of using and raising money themselves, use their reputation/popularity and use their suppliers market caps (e.g. NVIDIA, AMD, etc). The deal makes sense as long as the value projected to be added (i.e. via efficiency gains, loss of jobs, changing society, etc) exceeds the capital dilution for the supplier; they use their equity but the leftover equity value increase makes up for it.

Given all the passive investing, and funds invested in the top tech companies this is a VERY large pool of capital. It however increases leverage if the value doesn't materialise.

I agree with your general point: there is a tendency to group not least these deals together without distinction as confirmation of a pre-existing belief that the AI bubble is soon to collapse. The latter certainly might be true, but we should be careful about too quickly deciding what evidence supports it. I am inclined to strictly separate: (a) the NVIDIA deal as a vendor subsidizing one of their largest clients, which perhaps signals market weakness; from (b) the AMD deal as a non-market-leading vendor trying to entice a new enterprise client, who will only be able to use AMD's chips for serious training after significant (and risky) collaboration to improve their product offering.

This distinction is important to me because I see more concrete evidence for a possible material drop in NVIDIA's business short- to medium-term than a collapse of the sector as a whole. The chips act clearly shut them out unexpectedly from their second largest market and now it seems likely that Chinese chips will be competitive for training sooner than expected. Indeed, if Chinese AI firms are suddenly able to obtain even a roughly approximate product at considerably less cost, OpenAI will suddenly find themselves at a cost if not compute disadvantage to their Eastern competitors. It isn't a surprise, then, that OpenAI is now looking to reduce their present vendor lock-in with NVIDIA.

Overall, it's not great for the latter if they lose access to their second largest market, suddenly have viable competitors in their home market, and either lose some of a major client's business or have to significantly reduce pricing to retain it.

Nvidia is also investing hundreds of billions in OpenAI.

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