A fast-rising AI economy is increasingly being underwritten by a tight circle of companies financing and buying from one another, boosting valuations while stirring concerns about a bubble. OpenAI’s new pact with AMD—buying chips for the right to take up to a 10% stake—adds to a web that includes Nvidia’s pledge to invest up to $100 billion in OpenAI, Oracle’s sale of cloud capacity to OpenAI and its own purchases of Nvidia chips, and Nvidia’s stake in infrastructure provider CoreWeave. The circular flows have helped propel U.S. stocks to records, but analysts at Oxford Economics warn that if AI productivity gains arrive later or prove smaller than hoped, a sharp tech correction could ripple through the broader economy. Nvidia CEO Jensen Huang frames the bets as confidence in durable revenues and OpenAI’s “multitrillion-dollar” potential, while skeptics see a feedback loop that risks masking underlying demand.
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