AI titans’ ‘circular deals’ are starting to look like ‘daisy chains’

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Nvidia CEO Jensen Huang introducing Vera Rubin, a next-generation AI data centre platform, and Rubin Ultra, a next-generation AI GPU architecture, at a conference in San Jose, California, on March 16. He disagrees that Nvidia’s deals are circular. Photo: AFP

Digital screens display trading numbers on the floor of the New York Stock Exchange on July 23. The five biggest hyperscalers are Alphabet, Meta Platforms, Microsoft, Amazon and Oracle. Photo: AFP

James David SpellmanJames David Spellman, a graduate of Oxford University, is principal of Strategic Communications LLC, a consulting firm based in Washington, DC. Published: 8:30pm, 7 Sep 2026Updated: 9:27pm, 7 Sep 2026

The “circular deals” among AI titans increasingly resemble the “daisy chains” of the 1980s savings-and-loan crisis.

Forty years ago, interconnected transactions obscured the dangers, multiplied systemic risks and helped inflate asset values before roughly a third of US thrift banks failed. Today’s financial engineering – an incestuous ecosystem of interlocking multi-year commitments to provide financing, buy semiconductors, secure gigawatts of power and lease data centres – could meet a similar fate, especially if revenue fails to outpace costs or a black swan event eviscerates artificial intelligence (AI) trajectories.OpenAI has struck deals with Nvidia, CoreWeave and others ahead of an initial public offering planned for next year while competitors Anthropic and xAI have pursued similar agreements. Anthropic’s US$35 billion cloud-computing deal with provider Lambda is the latest example. Last month, the AI developer signed a US$45 billion arrangement with another Nvidia-backed neocloud, Nscale, to rent data-centre capacity.

Nvidia is involved in more than US$750 billion worth of AI investments, financing deals and partnerships, according to PitchBook. Demand from AI labs receiving Nvidia financial support will account for roughly a quarter of the company’s business next year, CFO Colette Kress said.

The rash of AI investments is unprecedented in scale – 4.5 times the level three years ago, according to Bank for International Settlements data. This raises a question: how much of the industry’s extraordinary growth is being financed by the same companies benefiting from it?

Meanwhile, hidden risks are colliding with a borrowing binge well under way. The five largest hyperscalers carry roughly US$1.65 trillion in debt through special purpose vehicles and other off-balance-sheet structures, exceeding the US$1.35 trillion they report directly, according to Nikkei.