The Pattern
No one's talking about how the money actually flows
A Invests in B
Microsoft pours $13B+ into OpenAI, buying a stake in the company
B Spends It on C
OpenAI commits billions to Azure cloud and NVIDIA GPUs
C Sells Back to A
NVIDIA sells chips to Microsoft's data centers. The circle closes.
The money goes in circles. Each company's growth depends on the others. What happens if one link breaks?
The Scale
What the deals say vs. what the numbers show
The Deal
Microsoft invested $13B+ in OpenAI
The Reality
OpenAI 2024 revenue: ~$3.7B
The Valuation
OpenAI valued at $150B
The Multiple
That's 40x revenue
The Growth
NVIDIA AI revenue doubled
The Concentration
~80% from a handful of buyers
In the dot-com boom, companies bought ads from each other with VC money. Today, AI companies buy compute from each other with investment money. The pattern rhymes.
Key Questions
What you should be asking
"Where's the outside money?"
Most AI revenue comes from other AI companies. Microsoft pays OpenAI, OpenAI pays Microsoft. NVIDIA sells to the hyperscalers who are also their investors. Who's the end customer?
"What's the real demand?"
Consumer AI products aren't profitable yet. ChatGPT costs more to run than it earns. Enterprise adoption is growing, but is it growing fast enough to justify these valuations?
"Who's left holding the bag?"
When circular flows stop, someone loses. The question is whether it's the companies, the investors, or the public markets that eventually absorb the correction.
Flow Types
Featured Case Study
The OpenAI ↔ Microsoft ↔ NVIDIA Triangle
Microsoft invests billions in OpenAI. OpenAI spends it on Microsoft Azure and NVIDIA GPUs. NVIDIA sells to Microsoft. The same money flows in circles. Trace the loop yourself.