'Circular' AI Mega-Deals by AI and Hardware Giants are Raising Eyebrows

"Nvidia is investing billions in and selling chips to OpenAI, which is also buying chips from and earning stock in AMD," writes SFGate. "AMD sells processors to Oracle, which is building data centers with OpenAI — which also gets data center work from CoreWeave. And that company is partially owned by, yes, Nvidia.

"Taken together, it's a doozy."


There are other collaborations and rivalries and many other factors at play, but OpenAI is the many-tentacled octopus in the middle, spinning its achievement of ChatGPT into a blitz of speculative investments. "We are in a phase of the build-out where the entire industry's got to come together and everybody's going to do super well," OpenAI CEO Sam Altman told the Wall Street Journal on Monday. "You'll see this on chips. You'll see this on data centers. You'll see this lower down the supply chain...."

Some worry that the more closely companies intertwine, the more susceptible they are to creating a bubble, or a market not actually supported by real consumer demand. "You don't have to be a skeptic about AI technology's promise in general to see this announcement as a troubling signal about how self-referential the entire space has become," Bespoke Investment Group wrote in a note to clients, per CNBC. "If NVDA has to provide the capital that becomes its revenues in order to maintain growth, the whole ecosystem may be unsustainable..."



Also, even with Nvidia's investment, AMD's shares and OpenAI's repeated fundraises, the ChatGPT-maker doesn't have the cash to meet all of these vast commitments. And if OpenAI's soaring projections about demand for AI computing don't bear out, there will be a lot of committed money — and a large share of the stock market — that would see its foundations topple.


Thanks to long-time Slashdot reader mspohr for sharing the news.

Read more of this story at Slashdot.