Unraveling the Circular Money Dynamics in AI’s Major Deals
The artificial intelligence (AI) industry is witnessing a surge in high-profile partnerships and investments, raising questions about the actual economic value generated versus the mere circulation of capital among major players.
A notable example is the recent collaboration between SoftBank and OpenAI. The two companies have established a 50-50 joint venture named Crystal Intelligence to offer enterprise AI solutions in Japan. While this move appears to be a strategic expansion into the Japanese market, it also highlights the intricate financial interdependencies within the AI sector. ([techcrunch.com](https://techcrunch.com/2025/11/05/softbank-openai-launch-new-joint-venture-in-japan-as-ai-deals-grow-ever-more-circular/?utm_source=openai))
SoftBank’s significant investment in OpenAI, coupled with their joint venture, prompts scrutiny over whether such deals are fostering genuine innovation or merely recycling funds within a closed ecosystem. This pattern is not isolated; similar instances are emerging across the industry.
For instance, Microsoft recently entered into a $9.7 billion agreement with Australia’s IREN to enhance its AI cloud capacity. This deal grants Microsoft access to infrastructure equipped with Nvidia’s GB300 GPUs, slated for deployment through 2026 at IREN’s Texas facility. Interestingly, IREN, originally a bitcoin-mining operation, has pivoted to AI workloads, leveraging its extensive GPU resources. The CEO of IREN anticipates that the Microsoft deal will occupy only 10% of the company’s total capacity, generating approximately $1.94 billion in annual revenue. ([techcrunch.com](https://techcrunch.com/2025/11/03/microsoft-inks-9-7bil-deal-with-australias-iren-for-ai-cloud-capacity/?utm_source=openai))
These developments underscore a trend where major AI deals often involve substantial investments that circulate among a select group of industry giants. This raises concerns about the sustainability of such investment models and whether they contribute to meaningful technological advancements or simply perpetuate a cycle of financial transactions.
The TechCrunch Equity podcast delves into these issues, examining the implications of these circular financial arrangements and their impact on the AI industry’s future. The discussion highlights the need for transparency and genuine value creation in AI investments to ensure the sector’s long-term viability and innovation.
