The Circular Economy of AI Capitalism

Okay so like, have you guys noticed how these tech companies are basically just trading money back and forth like it’s some sort of infinite money glitch? I’ve been absolutely obsessed with this phenomenon lately – it’s like watching the most expensive game of hot potato ever invented. Nvidia invests $100 billion in OpenAI, OpenAI spends that money on Nvidia chips, Nvidia’s valuation skyrockets because of the increased sales, and the cycle just keeps repeating. It’s capitalism eating its own tail and somehow getting fatter.

What’s wild to me is how nobody seems to question the absolute absurdity of this entire situation. These companies are basically creating their own demand by funding each other, and we’re all just sitting here watching the stock market go brrrr. It’s like if I started paying myself to watch anime and then claimed I had a successful business model because the money kept circulating. Actually wait, that sounds kinda genius…

The Self-Sustaining Ponzi Scheme

I’ve been reading about this stuff until my brain feels like mush, and the more I learn, the less sense it makes. These companies aren’t even pretending to need actual customers anymore – they’re each other’s customers! It’s like the entire AI industry decided to become one giant circular firing squad where everyone’s shooting money at each other and somehow getting richer.

The craziest part? This actually works in the short term. When Nvidia announces they’re investing in OpenAI, their stock goes up because everyone assumes this means more chip sales. When OpenAI gets that money and buys Nvidia chips, Nvidia’s revenue increases, which makes their stock go up even more. It’s a beautiful, terrifying feedback loop that defies all conventional logic about how businesses should operate.

When Valuation Becomes Mythology

What really blows my mind is how these valuations have completely detached from reality. OpenAI is supposedly worth like $500 billion in private markets despite having what, $12 billion in annual revenue? Meanwhile I’m over here trying to figure out if I can afford both a new graphics card and groceries this month. The math just isn’t mathing, you know?

These companies have created this mythology around themselves where the normal rules don’t apply. They’re not valued based on current profits or even realistic future projections – they’re valued based on the sheer audacity of their ambitions. It’s like we’ve collectively decided that traditional metrics are boring and we’d rather live in a world where companies are worth whatever number sounds coolest.

The Great AI Bubble

I can’t help but feel like we’re living through the dot-com bubble 2.0, but with way better graphics cards this time. Everyone’s throwing money at anything with “AI” in the name, and the companies at the top are just passing that money around in increasingly creative ways. The difference is that this time, the companies involved are actually producing real products – they’re just producing them for each other instead of for end consumers.

What happens when this musical chairs game stops? When the music ends and someone actually has to demonstrate that these investments can generate returns from outside the closed loop? That’s the billion-dollar question that keeps me up at night (along with my obsession with finding the perfect ramen recipe).

The Retail Investor’s Dilemma

Meanwhile, us normies are stuck trying to figure out whether to jump on this crazy train or watch from the sidelines. Do we YOLO our life savings into whatever stock is being pumped this week, or do we sit back and wait for the whole thing to collapse? It’s like trying to decide whether to join a pyramid scheme that’s already halfway to the moon.

The FOMO is real, but so is the fear of being the last one holding the bag when the music stops. I’ve seen people make insane returns by riding these waves, but I’ve also seen people lose everything by getting in at the wrong time. It’s the ultimate high-stakes game of timing, and the house always wins eventually.

When Reality Eventually Bites

At some point, these companies will have to demonstrate that their technology can actually generate value outside of their little circle jerk. They’ll need real customers who aren’t just other tech companies, actual products that people want to buy, and sustainable business models that don’t rely on infinite investment rounds.

Until then, we’re all just along for the ride, watching the most expensive experiment in economic theory unfold in real time. It’s equal parts fascinating and terrifying, like watching a car crash in slow motion while someone hands you hundred-dollar bills out the window.

Personally, I’m just sitting here with my popcorn, watching the show and trying not to get too emotionally invested in any particular outcome. Though if anyone from Nvidia wants to invest in my anime streaming habit, I’m totally open to creating my own circular economy…