Reports that Nvidia is in talks to give financial guarantees of almost $250 billion (€217 billion) to OpenAI for a massive data center project show two sides of the artificial intelligence boom.
On one level, it shows the monumental scale of AI's financial muscle and potential. On another, it shows the risks of a so-called "circular" financing system at the core of the AI ecosystem. If one domino falls, would others fall with it?
"The interconnected nature of the AI ecosystem is real," Gary Tan, portfolio manager at Allspring Global Investments, told DW. "But near term risks are mitigated by the strong balance sheets, cash flows and credit quality of the major providers funding the buildout."
Jan Frederik Slijkerman, a tech sector strategist at ING, agrees that the exceptionally strong financial positions of big tech companies such as Nvidia, Microsoft, Amazon and Alphabet (Google parent company) mitigates against the risks.
He says the degree of collaboration regarding AI is "fascinating" but does not see a "a systemic industry-wide risk arising from the observed interdependencies".
