Money For the Rest of Us · Wednesday, July 29, 2026
A practice termed 'circular finance' is observed where chip manufacturers like Nvidia lend directly to AI labs or specialized data centers that house their equipment. These facilities are then leased to AI providers, addressing the current imbalance where demand for compute power significantly outstrips supply.
“One of the criticisms has been circular finance. And so you have the chip manufacturers like Nvidia. They're lending to these AI labs or lending to Neo clouds, which essentially are data centers that are just built to hold Nvidia chips and other equipment for AI models. And then they're leased to AI providers.”
“Because one of the things we're seeing right now. And we discussed this in our strategy report last month, was that the demand for compute is significantly outpacing supply. So we have this CapEx buildout, but there's true demand here. This is not speculative demand. Right now, demand is greater than supply.”