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pat_k

(13,455 posts)

6. These types of circular, incestuous deals were the harbinger of doom in the dot com era.

Fri Feb 27, 2026, 03:29 PM

Feb 27

Take with whatever grains of salt you apply to all AI answers, but here is how Gemini summarizes:

Recent, in-depth reports from late 2025 and early 2026 indicate that the AI sector is heavily relying on circular financing—often called "AI incestuous deals"—where tech giants, chip manufacturers, and AI startups invest in each other and purchase each other's products, creating a self-reinforcing, potentially precarious, financial loop. Critics and market analysts worry this pattern mimics the 1999–2000 dot-com bubble, where companies inflated revenues by buying services from one another, setting the stage for a potential collapse.

Great illustration at this link:
https://economistwritingeveryday.com/2025/10/14/circular-ai-deals-reminiscent-of-disastrous-dot-com-vendor-financing-of-the-1990s/

I for one moved money I had in a standard Vanguard S&P index to an ETF that excludes the "Magnificent 7" (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla):
Defiance Large Cap ex-Mag 7 ETF

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Highlight:

OpenAI Raises $110 Billion Led by Amazon, Nvidia and SoftBank, Extending A.I. Boom [View all] Mr. Sparkle Feb 27 OP

Nothing new here angrychair Feb 27 #1

This message was self-deleted by its author jfz9580m Feb 27 #2

Don't mistake this for profits - AI is completely unprofitable FakeNoose Feb 27 #3

New tulip schemes annually. gAI Obsessed Feb 27 #4

Welcome to DU LetMyPeopleVote Feb 28 #7

Is it too big to fail yet? hunter Feb 27 #5

These types of circular, incestuous deals were the harbinger of doom in the dot com era. pat_k Feb 27 #6