"A small group of prominent tech companies had been handing money to each other for some time. The best summary was visual: Bloomberg clearly showed the circular flow of finances between Nvidia, AMD, Oracle, OpenAI, CoreWeave, and others. In the case of the Nvidia-OpenAI deal, the $100 billion investment would benefit new AI infrastructure, mostly filled with Nvidia hardware, which in turn would be paid for with that investment money."
"confidence in the rise of AI remained high among investors. In recent days, doubts have returned in a way reminiscent of the stock market declines that accompanied the announcement of DeepSeek R1 early last year. Now, OpenAI is reportedly dissatisfied with some Nvidia chips and is looking for alternatives. Shortly thereafter, reports followed about a possible investment from Nvidia for OpenAI worth $20 billion. Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman are trying to calm the situation, but investors do not seem reassured."
"Meanwhile, Claude Cowork, an AI tool with the ability to automate complex workflows, has also fueled the negative news cycle for various stocks. These are SaaS applications that could potentially be completely replaced by AI. This idea has been raised before, including with the unveiling of Computer Use models and agentic developer tools such as Devin. So far, the promise has not been fulfilled and the market is recovering quickly."
Uncertainty about a planned $100 billion investment tied to Nvidia and OpenAI has shaken investor confidence and affected the stock market. A circular flow of financing among companies like Nvidia, AMD, Oracle, OpenAI, and CoreWeave links hardware sales to investment money backing AI infrastructure. OpenAI reportedly finds some Nvidia chips unsatisfactory and is seeking alternatives while reports suggest Nvidia might instead invest roughly $20 billion. Nvidia's Jensen Huang and OpenAI's Sam Altman have publicly tried to calm markets, but investor doubts persist. New AI automation tools like Claude Cowork raise fears of SaaS displacement. Critics warn that unmet AI promises could trigger a broader market reassessment.
Read at Techzine Global
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