Bloomberg flags circular AI funding risks echoing 2008 crisis

Bloomberg reports that the artificial intelligence boom increasingly relies on circular financing arrangements reminiscent of 2008 market dynamics. Chipmakers and cloud providers are extending credit or investing directly in AI startups, which subsequently use those funds to purchase hardware from the same vendors. Broadcom recently agreed to lend Anthropic up to $42 billion for computing infrastructure, while Nvidia has invested over $40 billion in AI firms this year, including $30 billion in OpenAI. These transactions create reciprocal revenue streams where vendor capital effectively subsidizes customer purchases. Analysts warn this structure inflates top-line growth figures without independent demand validation. The concern centers on whether genuine commercial returns can sustain these leveraged positions if AI monetization stalls. Such circularity previously amplified losses during financial crises when underlying asset values failed to support debt loads. Investors are now scrutinizing balance sheets for similar exposure patterns across the semiconductor and cloud sectors.