The American economy is little more than a big bet on AI. Morgan Stanley investor Ruchir Sharma recently noted that money poured into AI investments now accounts for about 40% of the United States’ GDP growth in 2025, and AI companies are responsible for 80% of growth in American stocks. So how bad is it that the most recent major deal among AI giants, agreements that have driven up stock prices dramatically, look like a snake eating its own tail?
In recent months, Nvidia announced that it would invest $100 billion into OpenAI, OpenAI announced that it would pay $300 billion to Oracle for computing power, and Oracle announced it would buy $40 billion worth of chips from Nvidia. It doesn’t take a flow chart to get the feeling that these firms are just moving money around between each other. But surely that’s not happening…right?
It’s a little harder to get assurances of that than you might think.
Is it all round-tripping?
Many of these agreements are, on their face, mutually beneficial. If everything is on the level, while these deals might be circular, they should be moving everything forward. Rishi Jaluria, an analyst at RBC Capital Markets, told Gizmodo that deals like these could result in a “less capacity-constrained world,” which would allow for faster development of models that could produce higher returns on investment.
“The better models we have, the more we can realize a lot of these AI use cases that are on hold just because the technology isn’t powerful enough yet to handle it,” he said. “If that happens, and that can generate real [return on investment] for customers … that results in real cost savings, potentially new revenue generation opportunities, and that creates net benefits from a GDP perspective.”
So as long as we keep having AI breakthroughs and these companies figure out how to monetize their products, everything should be fine. On the off chance that doesn’t happen, though?
“If that doesn’t happen, if there is no real enterprise AI adoption, then it’s all round-tripping,” Jaluria said.
Round-tripping, generally speaking, refers to the unethical and typically illegal practice of making trades or transactions to artificially prop up a particular asset or company, making it look like it’s more valuable and in demand than it actually is. In this case, it would be tech companies that are trying to make it appear like they are more valuable than they actually are by announcing big deals with each other that move the stock price.
So what might suggest whether this money is actually accomplishing anything other than serving as hot air in a rapidly inflating bubble? Jaluria said he’s watching for faster developments of models, advancements in performance, and overall AI adoption. “If this leads to a step function change in the way enterprise is adopting and utilizing AI, that creates a benefit,” he said.
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