Business

The ‘loopification’ of AI is making me dizzy

Published

2 weeks ago

November 20, 2025

Welcome to Eye on AI, with AI reporter Sharon Goldman. In this edition, the ‘loopification’ of AI…Trump eyes state AI laws…Meta will partner with Yann LeCun’s new startup…andAI is now the fastest-adopted technology in history.

On Tuesday, Microsoft, Nvidia, and Anthropic announced strategic partnerships that Microsoft CEO Satya Nadella summed up this way: “We are increasingly going to be customers of each other.”

How very “Here we go round the mulberry bush,” right? Microsoft buys Anthropic’s models; Anthropic runs Claude on Microsoft’s Azure cloud; Anthropic buys Nvidia’s chips; and both Microsoft and Nvidia invest in Anthropic. If that sounds like a big circle going round and round and back again… that’s because it is. And honestly, it’s making me dizzy.

But this trio-loop-de-loop isn’t an anomaly. These days, it’s becoming the dominant business model of the AI industry. Hyperscalers, model labs and infrastructure companies are increasingly forming closed-loop partnerships that function as a kind of AI mutual-assurance pact: everyone is a partner, a vendor, and a customer at the same time.

For Nvidia, which blew past revenue targets in its Q3 earnings yesterday, posting a 62% surge in revenue growth, this kind of circle game has been a key to its success over the past three years. As Fortune’s Shawn Tully recently detailed, the company has been building its own circular ecosystem by investing in—and sometimes financing—its own customers, from OpenAI to CoreWeave. The goal is to engineer a perpetual-motion machine of GPU consumption—a way to guarantee demand in a world where hyperscalers are trying to build their own chips. For example, in September Nvidia committed to investing up to $100 billion in OpenAI. As part of the agreement, OpenAI would purchase “at least 10 gigawatts worth of capacity in Nvidia AI chips. “It’s very murky,” Seaport analyst Jay Goldberg said recently. ““It’s very unclear what the motivation here is … To what degree is Nvidia investing versus buying demand or subsidizing demand [for its chips]?”

There are plenty of other non-Nvidia loops as well. Anthropic, for instance, has long had a similar arrangement with Amazon: Amazon is a major investor in Anthropic, which instantly gave Anthropic access to AWS infrastructure, Amazon’s custom Tranium chips, and a major partner for training and running its AI models. Amazon, in turn, gets a revenue boost in its cloud and AI chip businesses. More recently, OpenAI announced a multiyear partnership in October with AMD—OpenAI gets 6 gigawatts of AMD GPUs, while AMD gives OpenAI the option to buy up to 10% of the company. AMD gets guaranteed demand; OpenAI gets a second chip supplier. Another loop.

There are sovereign loops, too: Just yesterday, AMD, Cisco and Saudi-backed HUMAIN formed a joint venture to build up to 1 gigawatt of AI infrastructure in the Saudi Kingdom. Each company is both an investor and an exclusive supplier—AMD and Cisco put money into the joint venture, and the joint venture is then contractually designed to buy AMD’s GPUs and Cisco’s networking gear, all inside HUMAIN’s Saudi data centers. It’s the same circular logic: investors fund the suppliers, the suppliers buy from the investors, and everyone gets to tout massive growth.

And Nvidia isn’t absent from this one either: it also announced a partnership with HUMAIN yesterday —alongside Elon Musk’s xAI—to build a major new AI data center in Saudi Arabia.

Is “loopification” bad? Well, Nvidia has long profited from it, and startups like OpenAI and Anthropic likely would not be where they are today without it. But there are inherent risks: Concentrated power within a tiny group of players; huge debt among companies that haven’t yet proven sustainable business models; blurry real market signals that makes it harder to tell whether there is real demand. What would happen if one of the players in the circle stumbles? And what happens to the players left out of the circle?

Circle games, after all, are fun. But we all know what happens at the end of “Ring Around the Rosy” — they all fall down. Nvidia’s strong quarterly results may have calmed AI bubble fears–for now–but how long can this loop-de-loop business model continue? I don’t know the answer. But at this point, I might need some Dramamine.

With that, here’s more AI news.

Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman

FORTUNE ON AI

Nvidia says it has ‘visibility to a half a trillion dollars’ in revenue through 2026. That would make it one of America’s biggest companies — Matthew Heimer

Nvidia CEO Jensen Huang earnings call namechecked Saudi AI company Humain three times. Here’s why — Jeremy Kahn

The stock market is barrelling toward a ‘show me the money’ moment for AI—and a possible global crash — Jim Edwards

AI’s power and water consumption is worrying the agriculture sector: ‘Don’t forget that it is also required for us to grow food’ — Angelica Ang

Nvidia blows past revenue targets and forecasts trillions in AI infrastructure spending by end of decade — Sharon Goldman

AI IN THE NEWS

Trump’s draft executive order targets state AI Laws. President Donald Trump is weighing a challenge to state AI regulations, according to a leaked draft reported by Reuters. The executive order aims to override state AI laws through litigation and by conditioning access to federal funding. The draft specifically criticizes California’s SB 53, calling it “complex and burdensome.” The order would create an AI Litigation Task Force to sue states and could withhold broadband funding from those with stringent AI rules. The proposal follows Trump’s push to attach similar preemption measures to the upcoming Defense Authorization Act bill. It is likely to face pushback at the state level and has already sparked MAGA backlash. Read more in Reuters.

Meta will partner with Yann LeCun’s new startup. Meta’s long-serving AI chief is leaving the company for his own startup. LeCun said in a post on LinkedIn that he was building a startup to carry forward the Advanced Machine Intelligence (AMI) research he had been working on at Meta’s FAIR and NYU. Last week, the Financial Times reported that LeCun was planning to launch his own start-up and was in early talks to raise funding for it. He called the creation of FAIR—Meta’s AI research Lab—his proudest non-technical accomplishment. Read the full post here.

Google DeepMind expands its robotics push with a new hire. Google DeepMind hired the former chief technology officer of Boston Dynamics, Aaron Saunders, as the company’s new VP of hardware engineering earlier this month, according to a report from Wired. The move is part of CEO Demis Hassabis’ DeepMind’s ambition to transform Gemini into an operating system for physical robots. Hassabis has previously said DeepMind is trying to build an AI system that can work “out-of-the-box, across any body configuration.” Boston Dynamics, known for its advanced legged robots, was actually briefly owned by Google, which acquired the company in 2013 and sold it four years later. While at the company, Saunders worked on an amphibious six-legged prototype before becoming CTO in 2021. Read more in Wired.

Europe scales back its privacy and AI laws. The EU has proposed a series of changes to its landmark privacy rules, GDPR, and a delay to major provisions of the AI Act. The proposal would ease data-sharing restrictions, allow personal data to be used for AI training under certain conditions, extend compliance deadlines for high-risk AI systems, and cut down on Europe’s ubiquitous cookie pop-ups. The Commission frames the changes as pro-innovation simplification, but leaked drafts have already sparked backlash from civil rights groups and lawmakers who say the EU is caving to pressure from Big Tech. Read more in The Verge.

AI CALENDAR

Nov. 26-27: World AI Congress, London.

Dec. 2-7: NeurIPS, San Diego.

Dec. 8-9: Fortune Brainstorm AI San Francisco. Apply to attend here.

Jan. 7-10: Consumer Electronics Show, Las Vegas.

March 12-18: SWSW, Austin.

March 16-19: Nvidia GTC, San Jose.

April 6-9: HumanX, San Francisco.

EYE ON AI NUMBERS

60%

That’s the percentage of adults in the U.S. who have tried generative AI since the launch of OpenAI’s ChatGPT, according to a new report from the Computer and Communications Industry Association. This also makes it the fastest-adopted technology in history.

According to the 2025 SPICE AI Report, roughly three in five U.S. adults have now used GenAI in less than three years, outpacing the adoption curves of both smartphones and the internet. Daily use of GenAI among U.S. adults jumped from 12% to 17% over just eight months, while workplace integration is accelerating even faster. Around 40% of workers now use AI tools at work, reporting an average 15% boost in productivity. Among AI-using employees, daily usage surged from 21% to 31% between March and July 2025. Most AI-users, 77%, also have a favorable impression of the technology—a feeling that is trending more positive over time, according to the report.

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Business

SpaceX to offer insider shares at record-setting valuation

Published

20 minutes ago

December 5, 2025

Jace Porter

SpaceX is preparing to sell insider shares in a transaction that would value Elon Musk’s rocket and satellite maker at a valuation higher than OpenAI’s record-setting $500 billion, people familiar with the matter said.

One of the people briefed on the deal said that the share price under discussion is higher than $400 apiece, which would value SpaceX at between $750 billion and $800 billion, though the details could change.

The company’s latest tender offer was discussed by its board of directors on Thursday at SpaceX’s Starbase hub in Texas. If confirmed, it would make SpaceX once again the world’s most valuable closely held company, vaulting past the previous record of $500 billion that ChatGPT owner OpenAI set in October. Play Video

Preliminary scenarios included per-share prices that would have pushed SpaceX’s value at roughly $560 billion or higher, the people said. The details of the deal could change before it closes, a third person said.

A representative for SpaceX didn’t immediately respond to a request for comment.

The latest figure would be a substantial increase from the $212 a share set in July, when the company raised money and sold shares at a valuation of $400 billion.

The Wall Street Journal and Financial Times, citing unnamed people familiar with the matter, earlier reported that a deal would value SpaceX at $800 billion.

News of SpaceX’s valuation sent shares of EchoStar Corp., a satellite TV and wireless company, up as much as 18%. Last month, Echostar had agreed to sell spectrum licenses to SpaceX for $2.6 billion, adding to an earlier agreement to sell about $17 billion in wireless spectrum to Musk’s company.

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The world’s most prolific rocket launcher, SpaceX dominates the space industry with its Falcon 9 rocket that launches satellites and people to orbit.

SpaceX is also the industry leader in providing internet services from low-Earth orbit through Starlink, a system of more than 9,000 satellites that is far ahead of competitors including Amazon.com Inc.’s Amazon Leo.

SpaceX executives have repeatedly floated the idea of spinning off SpaceX’s Starlink business into a separate, publicly traded company — a concept President Gwynne Shotwell first suggested in 2020.

However, Musk cast doubt on the prospect publicly over the years and Chief Financial Officer Bret Johnsen said in 2024 that a Starlink IPO would be something that would take place more likely “in the years to come.”

The Information, citing people familiar with the discussions, separately reported on Friday that SpaceX has told investors and financial institution representatives that it is aiming for an initial public offering for the entire company in the second half of next year.

A so-called tender or secondary offering, through which employees and some early shareholders can sell shares, provides investors in closely held companies such as SpaceX a way to generate liquidity.

SpaceX is working to develop its new Starship vehicle, advertised as the most powerful rocket ever developed to loft huge numbers of Starlink satellites as well as carry cargo and people to moon and, eventually, Mars.

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Business

U.S. consumers are so strained they put more than $1B on BNPL during Black Friday and Cyber Monday

Published

51 minutes ago

December 5, 2025

Jace Porter

Financially strained and cautious customers leaned heavily on buy now, pay later (BNPL) services over the holiday weekend.

Cyber Monday alone generated $1.03 billion (a 4.2% increase YoY) in online BNPL sales with most transactions happening on mobile devices, per Adobe Analytics. Overall, consumers spent $14.25 billion online on Cyber Monday. To put that into perspective, BNPL made up for more than 7.2% of total online sales on that day.

As for Black Friday, eMarketer reported $747.5 million in online sales using BNPL services with platforms like PayPal finding a 23% uptick in BNPL transactions.

Likewise, digital financial services company Zip reported 1.6 million transactions throughout 280,000 of its locations over the Black Friday and Cyber Monday weekend. Millennials (51%) accounted for a chunk of the sizable BNPL purchases, followed by Gen Z, Gen X, and baby boomers, per Zip.

The Adobe data showed that people using BNPL were most likely to spend on categories such as electronics, apparel, toys, and furniture, which is consistent with previous years. This trend also tracks with Zip’s findings that shoppers were primarily investing in tech, electronics, and fashion when using its services.

And while some may be surprised that shoppers are taking on more debt via BNPL (in this economy?!), analysts had already projected a strong shopping weekend. A Deloitte survey forecast that consumers would spend about $650 million over the Black Friday–Cyber Monday stretch—a 15% jump from 2023.

“US retailers leaned heavily on discounts this holiday season to drive online demand,” Vivek Pandya, lead analyst at Adobe Digital Insights, said in a statement. “Competitive and persistent deals throughout Cyber Week pushed consumers to shop earlier, creating an environment where Black Friday now challenges the dominance of Cyber Monday.”

This report was originally published by Retail Brew.

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Business

AI labs like Meta, Deepseek, and Xai earned worst grades possible on an existential safety index

Published

1 hour ago

December 5, 2025

Jace Porter

A recent report card from an AI safety watchdog isn’t one that tech companies will want to stick on the fridge.

The Future of Life Institute’s latest AI safety index found that major AI labs fell short on most measures of AI responsibility, with few letter grades rising above a C. The org graded eight companies across categories like safety frameworks, risk assessment, and current harms.

Perhaps most glaring was the “existential safety” line, where companies scored Ds and Fs across the board. While many of these companies are explicitly chasing superintelligence, they lack a plan for safely managing it, according to Max Tegmark, MIT professor and president of the Future of Life Institute.

“Reviewers found this kind of jarring,” Tegmark told us.

The reviewers in question were a panel of AI academics and governance experts who examined publicly available material as well as survey responses submitted by five of the eight companies.

Anthropic, OpenAI, and Google DeepMind took the top three spots with an overall grade of C+ or C. Then came, in order, Elon Musk’s Xai, Z.ai, Meta, DeepSeek, and Alibaba, all of which got Ds or a D-.

Tegmark blames a lack of regulation that has meant the cutthroat competition of the AI race trumps safety precautions. California recently passed the first law that requires frontier AI companies to disclose safety information around catastrophic risks, and New York is currently within spitting distance as well. Hopes for federal legislation are dim, however.

“Companies have an incentive, even if they have the best intentions, to always rush out new products before the competitor does, as opposed to necessarily putting in a lot of time to make it safe,” Tegmark said.

In lieu of government-mandated standards, Tegmark said the industry has begun to take the group’s regularly released safety indexes more seriously; four of the five American companies now respond to its survey (Meta is the only holdout.) And companies have made some improvements over time, Tegmark said, mentioning Google’s transparency around its whistleblower policy as an example.

But real-life harms reported around issues like teen suicides that chatbots allegedly encouraged, inappropriate interactions with minors, and major cyberattacks have also raised the stakes of the discussion, he said.

“[They] have really made a lot of people realize that this isn’t the future we’re talking about—it’s now,” Tegmark said.

The Future of Life Institute recently enlisted public figures as diverse as Prince Harry and Meghan Markle, former Trump aide Steve Bannon, Apple co-founder Steve Wozniak, and rapper Will.i.am to sign a statement opposing work that could lead to superintelligence.

Tegmark said he would like to see something like “an FDA for AI where companies first have to convince experts that their models are safe before they can sell them.

“The AI industry is quite unique in that it’s the only industry in the US making powerful technology that’s less regulated than sandwiches—basically not regulated at all,” Tegmark said. “If someone says, ‘I want to open a new sandwich shop near Times Square,’ before you can sell the first sandwich, you need a health inspector to check your kitchen and make sure it’s not full of rats…If you instead say, ‘Oh no, I’m not going to sell any sandwiches. I’m just going to release superintelligence.’ OK! No need for any inspectors, no need to get any approvals for anything.”

“So the solution to this is very obvious,” Tegmark added. “You just stop this corporate welfare of giving AI companies exemptions that no other companies get.”

This report was originally published by Tech Brew.

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