OpenAI, Nvidia Fuel $1T AI Market with Web of Circular Deals (www.bloomberg.com)

OpenAI and Nvidia are at the center of a “web of circular deals” that’s accelerating a roughly $1 trillion AI market by tightly linking model makers, cloud providers and chip vendors into mutually reinforcing revenue streams. Strategic investments and commercial arrangements — notably Microsoft’s big bet on OpenAI and large-scale purchases of Nvidia GPUs for Azure, plus cloud firms reselling AI services built on those models — create loops where compute buys fuel model development, models drive cloud consumption, and cloud scale justifies more specialized hardware. That cycle is rapidly turning capital into recurring cloud and chip demand. Technically, the dynamic is intensifying demand for datacenter GPUs (A100/H100 and related systems), specialized stacks for training and inference, and optimizations (quantization, pruning, distributed training) to manage cost and latency. It also concentrates influence over the full stack — silicon, software (CUDA, libraries, inference frameworks) and model distribution — which speeds innovation but raises supply, pricing and competition risks (GPU bottlenecks, vendor lock‑in, and regulatory scrutiny). For practitioners, expect continued pressure to optimize model efficiency, design for heterogeneous accelerators (including TPUs and custom ASICs), and navigate tighter commercial dependencies between platform providers and AI labs.