Investors Fear Financial Bubble Due to Mutual Investments by AI Companies
AI giants invest in startups that then purchase services from their own investors
Major technology companies are investing in AI startups, which use the received funds to purchase computing power and other services from their investors. As The Wall Street Journal notes, such financial ties raise questions about the sustainability of the rapidly growing AI market.
Last week, Google's parent company, Alphabet, experienced the largest single-day drop in market value in its history, losing approximately $475 billion in capitalization. At the same time, shares of data center operator CoreWeave, which procures Nvidia equipment and provides computing power for AI, declined. Analysts refer to the company as the "canary in the coal mine" for the AI infrastructure financing market.
Investor concerns are growing amid the large-scale expansion of data centers and the sector's high debt load. Separately, the Bank of Korea warned as early as July about the risk of "semiconductor Dutch disease"—an excessive concentration of resources in one industry. Meanwhile, South Korean President Lee Jae-myung proposed nearly doubling budget expenditures on AI and related semiconductor projects in 2027.
