The commodification of AI is advancing through circular deals, where compute capacity is bought and sold like a commodity, with companies like Nvidia providing capital and products to startups in exchange for guaranteed access to their GPUs. This model is similar to traditional commodity markets, where a bank lends money to a development company, and the bank is guaranteed a purchase of the commodity (e.g., oil) by the development company. However, when circular deals become overly complex or opaque, they can introduce risks, such as overextension of lenders or hidden obligations, which can lead to financial instability. AI summary
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