OpenAI's Circular Deals and the AI Infrastructure Boom: A Bubble or the Next Tech Revolution?

The artificial intelligence (AI) infrastructure boom has reached unprecedented scale, with OpenAI at its epicenter. The company's partnerships with Microsoft, Nvidia, Oracle, and other tech giants have created a web of financial interdependencies that promise to reshape global computing but also raise urgent questions about sustainability. As OpenAI commits to over $1 trillion in infrastructure spending from 2025 to 2035, investors must grapple with whether this represents the next tech revolution or a speculative bubble fueled by circular financing and overleveraged bets.

The Financial Architecture of OpenAI's Ecosystem

OpenAI's partnerships are defined by staggering sums and complex revenue-sharing structures. Microsoft, for instance, holds a 27% stake in OpenAI's for-profit business and has invested over $13 billion to date. While Microsoft's revenue share from OpenAI dropped from 20% to 8% in 2025, it still received $865.8 million in the first three quarters of this year alone according to leaked documents. Meanwhile, Nvidia has pledged up to $100 billion in infrastructure support, including data center and power capacity, to enable OpenAI's next-generation models according to official announcements. Oracle, too, has signed a $300 billion, five-year cloud computing deal to supply 4.5 gigawatts of data center capacity annually.

These agreements are not one-sided. OpenAI's infrastructure spending is projected to reach $1.4 trillion by 2033, with partners like AMD, Broadcom, and CoreWeave also locked into multi-decade commitments. For example, AMD has agreed to sell up to 160 million shares to OpenAI at $0.01 per share in exchange for a $90 billion GPU purchase commitment, while Broadcom has committed $350 billion for custom AI accelerators. Such arrangements create a feedback loop: partners fund OpenAI's infrastructure, which in turn drives demand for their own products, creating a circular economy of capital.

Market Growth vs. Financial Realities

The AI infrastructure market is undeniably booming. Gartner estimates global AI spending will hit $1.5 trillion in 2025 and surpass $2 trillion in 2026, driven by hyperscalers like Microsoft, Amazon, and Alphabet, which are collectively investing over $350 billion in 2025 alone according to KKR analysis. However, OpenAI's financials tell a different story. Despite its user base growing to 44% of the global adult population, HSBC projects the company will remain unprofitable by 2030, facing a $207 billion funding shortfall. Its annual cloud-compute costs ($60 billion) far exceed its $10–12 billion in revenue according to market analysis.

This imbalance is compounded by the sheer scale of infrastructure commitments. OpenAI's $792 billion in cloud and AI infrastructure costs from late 2025 to 2030-and a $1.4 trillion in compute commitments by 2033-are predicated on the assumption that revenue will grow exponentially. Yet, as Bloomberg notes, concerns are mounting about the lack of tangible productivity gains from AI investments and the risk of speculative overvaluation.

Risks for Partners: Leverage, Liquidity, and Long-Term Exposure

The financial risks for OpenAI's partners are equally daunting. Oracle's $300 billion cloud deal has pushed its leverage to potentially unsustainable levels, prompting credit agencies like Moody's to flag concerns over its balance sheet. Similarly, CoreWeave's $22.4 billion "stock-for-capacity" deal with OpenAI and a $6.3 billion hardware order from Nvidia raise questions about transparency and circular financing. Critics argue that these agreements may inflate revenue recognition without reflecting real demand according to industry analysis.

For hardware vendors like Nvidia, Broadcom, and AMD, the stakes are even higher. OpenAI's $115 billion projected burn by 2029 could strain supply chains and delay performance milestones. If OpenAI's models fail to deliver expected returns, partners risk being left with underutilized infrastructure and unrecouped R&D costs. As The Information highlights, these companies are now exposed to counterparty risk, with their fortunes increasingly tied to OpenAI's success.

The Bubble Debate: Dot-Com Parallels or Sustainable Growth?

The parallels to the dot-com bubble are hard to ignore. Just as internet startups in the late 1990s burned through capital with little revenue, today's AI infrastructure boom is driven by speculative bets on future value. Bloomberg warns that the sector could face a correction if demand fails to materialize, while KKR's analysis cautions that AI infrastructure's compounding growth may not offset short-term cash-burn challenges.

Yet, proponents argue that AI's transformative potential justifies the investment. The demand for specialized hardware, such as Nvidia's GPUs, is expected to drive $3–4 trillion in infrastructure spending by 2030 according to analyst forecasts, and sustainability pressures are pushing companies to adopt energy-efficient solutions according to industry reports. Moreover, OpenAI's restructuring-granting it more operational freedom while retaining Microsoft's stake-suggests a long-term strategy to balance innovation with profitability.

Conclusion: A High-Stakes Gamble

OpenAI's partnerships with Microsoft, Nvidia, and others represent a high-stakes gamble on the future of AI. While the infrastructure boom is undeniably transformative, the financial interdependencies and risks involved-ranging from leverage-heavy contracts to circular financing-pose significant challenges. Investors must weigh the potential for AI to deliver the next tech revolution against the likelihood of a correction if growth assumptions fail. For now, the market remains in a holding pattern, betting on a future where AI's promise justifies today's exorbitant costs.