"Days later, OpenAI struck a similar multibillion-dollar arrangement with AMD. Celebrated by investors, these deals also raised eyebrows. To some observers, they looked eerily like the circular financing arrangements of the late 1990s, when vendors and clients reinforced each other's valuations without generating real value. Bloomberg aptly described the pattern as an "increasingly complex and interconnected web of business transactions" fueling a trillion-dollar AI boom."
"Paulo Carvão is Senior Fellow at Harvard Kennedy School's Mossavar-Rahmani Center for Business and Government, focusing on Tech Policy and AI regulation. A former IBM executive with 30+ years in technology and business, he serves as the inaugural Entrepreneur-in-Residence at Harvard's Institute of Politics GovLab. He also advises tech startups, invests in venture capital, and has held fellowships at Harvard's Advanced Leadership Initiative and Safra Center for Ethics."
In late September, Nvidia announced plans to invest up to $100 billion in OpenAI to fund a new generation of data centers, and OpenAI pledged to purchase millions of Nvidia chips for those facilities. Days later OpenAI reached a multibillion-dollar arrangement with AMD. Investors celebrated the partnerships, while critics likened them to late-1990s circular financing, where vendors and clients reinforced valuations without creating proportional value. Bloomberg called the pattern an increasingly complex and interconnected web of business transactions fueling a trillion-dollar AI boom. Paulo Carvão is Senior Fellow at Harvard Kennedy School's Mossavar-Rahmani Center for Business and Government and a former IBM executive with over 30 years in technology and business.
Read at Harvard Business Review
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