Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals
Summary
This article analyzes the commodification of AI compute through circular financing deals and how such structures may transform AI into a fungible commodity like electricity. It explains the mechanics with examples (Nvidia, SpaceX, OpenAI, CoreWeave) and discusses potential risks and resilience hinges, including off-balance sheet financing and backstops. The piece argues that circular deals can fuel AI growth but may become dangerous if lenders overextend or standards erode.