Nvidia’s Massive OpenAI Deal Fuels ‘Circular’ Financing Concerns - Bloomberg.com

Three years after OpenAI and Nvidia Corp. helped kick off the global artificial intelligence frenzy, the two firms are joining forces to pave the way for a more costly phase of development with a deal that has drawn attention to "circular" financial practices.
OpenAI, the privately-held AI research lab behind the popular chatbot ChatGPT, said on Tuesday it has struck a deal with Nvidia – one of the world's leading manufacturers of computer chips and other technologies – to create a new generation of AI hardware. The agreement, worth an undisclosed amount, is meant to help Nvidia produce more powerful AI chips and boost the development of OpenAI's language models.
The deal is significant because it highlights the close relationship between Nvidia and OpenAI, as well as the financial backing they have received over the years. Both companies have been at the forefront of the development of artificial intelligence and have received significant financing from investors to help fund their research and development efforts.
The agreement has also drawn attention to the "circular" financial practices that have become common in the tech industry. In this scenario, investors provide funding to tech startups in the form of venture capital, which is then used to develop technologies that are eventually sold to other companies, which in turn receive funding from the same investors. In effect, the money is circulating within the same group of companies, with little tangible benefit to the economy or the end consumers.
The Nvidia-OpenAI deal has raised concerns about the lack of transparency in the tech industry and the need for regulations to prevent the concentration of power and money. It is unclear what the long-term implications of this deal will be, but it highlights the need for caution and careful consideration when it comes to the role of venture capital and the tech industry in the global economy.