The AI Boom’s Hidden Feedback Loop: When Financing Becomes the Product

The AI infrastructure race is accelerating, but what if part of it is running in circles?

Ned Gandevani reveals how “circular financing”,  where chipmakers and hyperscalers finance their customers’ hardware purchases,  may be inflating both sales and valuations.

NVIDIA, AMD, and others are effectively funding their own demand, creating what looks like exponential growth. But when monetization lags, the result could be sharp valuation corrections, a déjà vu from the dot-com overbuild.

Insight: 2025 AI CapEx ≈ $325B, but visible monetization ≈ $142B,  a monetization-to-CapEx ratio of just 0.44.

Investors, it’s time to ask: Are we financing real growth or feeding the illusion of it?

For a deeper analysis, refer to Dr. Gandevani’s full research paper “When Financing Feeds the Product: How Circular Capital Could Undercut the AI Build-Out” available at https://nedgandevani.nmgfunds.com

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