Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals
emergingtrajectories.com
July 29, 2026
8 min read
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47/100
Summary
AI companies are facing criticism for circular financing and customer relationships, with examples including OpenAI raising funds from Microsoft to spend on Microsoft servers and CoreWeave financing debt through Nvidia purchases. Analysts draw parallels to the dot-com bubble of 1999, suggesting that current circular investments may lead to a similar outcome.
Key Takeaways
- The AI industry is experiencing a shift towards commodification, treating intelligence as a fungible resource similar to electricity or natural gas.
- Circular financing deals in AI, where companies invest in each other in a closed loop, are becoming a common strategy for securing revenue and facilitating growth.
- The U.S. government is promoting circular deal-making in the critical minerals sector to enhance supply chain resilience, exemplified by long-term agreements with companies like MP Materials.
- Analysts draw parallels between current circular investments in AI and the dot-com bubble of 1999, suggesting potential risks but also recognizing the evolution of the industry.
Community Sentiment
Positives
- Some commenters recognize LLMs as exhibiting verbal intelligence, which could redefine how we view AI capabilities in practical tasks.
- The potential for LLMs to offload complex reasoning tasks is seen as a form of intelligence, suggesting they can significantly enhance productivity.
Concerns
- Skepticism runs high regarding the hype around LLMs being labeled 'intelligent' — many argue we haven't achieved true AI yet.
- Concerns about the ethical implications of using scraped content without attribution loom large, questioning the integrity of current AI training methods.
- The commodification of AI raises alarms about inequality and the potential for propaganda to shape public perception, which isn't good for society.
