July 29, 2026
Cash me outside the data center
Commodification of Intelligence: Good, Bad, and Ugly Circular AI Deals
AI money-go-round has commenters asking: smart business or bubble cosplay?
TLDR: The article argues that AI’s weird invest-in-each-other, buy-from-each-other deals may be a sign the industry is turning into a utility market, not just a bubble. Commenters weren’t fully sold: some saw normal business evolution, while others feared fuzzy valuations, hidden risk, and hype pretending to be intelligence.
The article says the latest AI money loop may not be pure madness after all: big companies invest in each other, then turn around and buy each other’s services, much like old-school oil, mining, and electricity deals. The big claim is that this could mean artificial intelligence is becoming less like a flashy gadget and more like a basic utility you buy the way you buy power or fuel. But in the comments, nobody was ready to just nod politely and move on.
Instead, the crowd turned this into a full-on trust issue. One commenter basically said the real drama isn’t whether circular deals are good or bad, but whether anyone can still tell what anything is actually worth. Another worried that the "healthy" and "dangerous" versions can look almost identical at first glance, especially when the risky stuff is hidden away from plain sight. Translation for non-finance readers: people are nervous that some of these deals may look solid until, suddenly, they don’t.
Then came the philosophical brawl. One skeptical voice mocked the phrase "commodification of intelligence", asking if people had really skipped past the tiny question of whether large language models—chatbots like ChatGPT—are even intelligent at all. Another pushed back on the whole commodity analogy, arguing that today’s AI hardware is still changing too fast to be treated like boring, standardized server gear. The vibe was part market panic, part nerd argument, part meme: are these firms building the future, or just getting high on their own supply?
Key Points
- •The article argues that circular financing and customer relationships in AI should be analyzed as part of a broader shift toward AI commodification rather than treated simply as signs of a bubble.
- •It describes AI compute capacity as moving from a product-based business model toward a fungible commodity model similar to electricity or raw materials.
- •The article explains that circular deals are common in traditional commodity industries because guaranteed future purchases can help developers secure bank financing for expensive infrastructure.
- •A simplified commodity example in the article shows how an off-take agreement and possible equity stake can create predictable revenue and reduce lender risk.
- •Historical and current examples cited include Japanese commodity-financing practices since the 1960s, Jamaica in the 1980s, and MP Materials' long-term purchase arrangements involving the US government and General Motors.