Nvidia is among equity investors in Musk’s xAI chip deal

  • Here we go! AI circle news ... again!
ai hype nvda 27 August 2025 2

Some cross holding headlines hitting the news wires

  • Nvidia is among equity investors in Musk’s xAI chip deal
  • Musk’s xAI nears $20 billion capital raise tied to Nvidia chips

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Investments within the AI “circle” — that is, the network of interconnected deals and funding among major AI players — have drawn criticism for creating a self-reinforcing loop rather than generating real value. For example, NVIDIA pledging massive investments into OpenAI (while also supplying it with chips), then OpenAI committing huge cloud deals to Oracle (which in turn spends on NVIDIA), creates a circular flow of capital and revenue. Critics argue these deals may inflate valuation but don’t necessarily reflect strong fundamentals.

Some observers warn this structure resembles past speculative bubbles, where hype and financial engineering overshadow substantive business performance.

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