Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals
The AI industry is experiencing circular financing and customer relationships, with companies like OpenAI and Nvidia engaging in deals that have sparked criticism and concerns of a potential bubble burst. However, these circular deals may indicate the commodification of AI, where compute capacity is becoming a fungible resource that can be bought and sold like electricity or other commodities. As the AI industry continues to evolve, it is likely that circular deals will play a significant role in shaping the market and enabling the development of new technologies.
- ▪OpenAI raises money from Microsoft and spends it on Microsoft servers, while Nvidia backstops CoreWeave debt and CoreWeave buys Nvidia GPUs.
- ▪Analysts have drawn comparisons between the current AI market and the dot-com bubble of 1999, but the author argues that circular deals are a natural part of the commodification of AI.
- ▪The AI industry is moving towards a model where compute capacity is bought and sold like a commodity, rather than as a product or service.
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| Original publisher | Emergingtrajectories |
| Canonical URL | https://www.emergingtrajectories.com/lh/commodification-and-circularity/ |
| Publication time | Tue, 28 Jul 2026 19:44:14 +0000 |
| Retrieval time | 2026-07-28T19:45:54.789Z |
| Last seen | 2026-07-28T19:45:54.789Z |
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Opening excerpt (first ~120 words) tap to expand
Every few months, and especially this week, the AI space gets criticized for circular financing and customer relationships. OpenAI raises money from Microsoft, spending it on Microsoft servers; Nvidia backstops CoreWeave debt, and CoreWeave buys Nvidia GPUs. “The bubble is about to burst!” analysts scream. Analysts point to dot-com deals with circular investments in 1999, arguing that this is all bound to happen again[1][2]. They are wrong. Circular deals are more interesting than “good” or “bad.” They show the AI industry isn't just maturing, but modifying the idea of “AI” to something that is less a technology product, and more a commodity. Imagine that—intelligence available like electricity, and the underlying financial system structured accordingly.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at Emergingtrajectories.
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