An investigation into AI circular deals reveals how Microsoft, OpenAI, and Nvidia pay each other for cloud and AI services, potentially distorting revenue metrics and masking true customer demand.
The article highlights Microsoft's role in circular deals where it pays OpenAI for AI services and receives payments from Nvidia for cloud credits, potentially inflating revenue. Without full text, magnitude unclear.
Microsoft reportedly pays OpenAI for access to AI models while receiving cloud services payments from Nvidia, creating a reciprocal financial flow that may inflate its revenue from AI-related services.
Yes, if a significant portion of its AI revenue comes from deals that effectively involve the same money circulating among a small group of companies, true external demand may be less than reported.
Nvidia's role in the circular deals involves paying Microsoft for cloud credits while receiving payments for AI hardware, creating a loop that could inflate revenues. Limited article text restricts confidence.
Nvidia likely sells GPUs to Microsoft and other cloud providers, which then rent out AI processing that Nvidia itself uses, creating a circular flow of payments that boost Nvidia's reported hardware revenue.
If the circular deals are material, a portion of Nvidia's AI chip sales might be driven by internal demand within the loop rather than end-customer adoption, potentially overstating true demand.
The article examines how Microsoft, OpenAI, and Nvidia maintain a web of reciprocal payments for AI services and cloud credits, potentially inflating their reported revenues. These circular deals blur the line between genuine external sales and internal transfers, raising questions about the sustainability of AI-driven revenue growth. Without access to the full article, specific financial details remain unconfirmed.
AI circular deals refer to financial arrangements where companies like Microsoft, OpenAI, and Nvidia pay each other for services, potentially inflating each other's revenues without generating new external sales.
The article mentions Microsoft, OpenAI, and Nvidia as the primary participants in the circular payment arrangements for AI services and cloud credits.