Is Circular AI Financing Really as Bad as It Sounds? (Level 1)

Some people say big technology companies use 'circular financing' to make their AI business look stronger. But the real idea is called vendor financing. A large company gives money to a smaller AI company. The smaller company then uses that money to buy services from the large company. For example, Microsoft invested more than 13 billion dollars in OpenAI. In one quarter, OpenAI paid Microsoft almost 3 billion dollars to use its servers. That was 71 percent of Microsoft's AI income. Amazon and Google also invested in an AI company called Anthropic, which then used their cloud services and chips. These AI companies do not make a profit yet. If they fail, the big companies lose their investment and a customer. These are real investments, not fake deals. The risk is concentrated, but the money is real.