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Experts warn AI circular deals resemble dot-com bubble
Concerns grow that AI financing may be inflating valuations similarly to the dot-com bubble era.
Circular financing deals linking OpenAI, Nvidia, AMD, and Oracle are raising concerns of inflated valuations reminiscent of the 2000 dot-com bubble. Investments often recycle into hardware and cloud contracts, artificially boosting financial appearances. While executives defend the arrangements as necessary to meet surging compute demand, analysts warn that the opaque capital flows could misrepresent true profitability and sustainability in the AI sector, potentially creating risk for investors and long-term market stability.