Circular financing ain’t what it used to be
12 hours ago
- Oracle's $300 billion deal with OpenAI in September 2025 caused a stock surge but was criticized as unsustainable.
- Nvidia is considering a $250 billion backstop for an OpenAI-led data center, but the market views it as desperation rather than good news.
- Apple, once mocked for not investing heavily in AI, has overtaken Nvidia in market performance.
- SpaceX, which positioned itself as an AI company, has dropped over 25% in the last month and more than 50% from its June high.
- Creditors are becoming wary of circular financing and off-balance-sheet financing, signaling trouble for the AI boom.
- The GenAI boom has been sustained by hope and circular financing rather than profits, and this may no longer be enough.