AI firms signed major deals with chipmakers, but the agreements raised concerns that industry funding is increasingly circular — and possibly concealing a bubble.
Elon Musk’s xAI raised $20 billion, a chunk of which comes from Nvidia, with the expectation that it would be used to buy Nvidia chips; Nvidia also recently backed OpenAI with up to $100 billion to build data centers filled with Nvidia semiconductors.
Separately, OpenAI agreed a partnership with AMD, buying both stock and chips: The deal boosted AMD’s share price, and thus covered the price of the chips, Bloomberg’s Matt Levine noted.
The insularity of the various deals could “overstate the robustness of the AI ecosystem,” The New York Times reported.
