Circular AI Deals: The Good, Bad, and Ugly of Commodifying Intelligence
cl42 · hn · 2026-07-30
This article dives deep into the growing phenomenon of circular deals in the AI industry, where tech companies buy AI products and services from each other to inflate revenue and market size. The author calls this the "commodification of intelligence" and analyzes it across three dimensions:
- The Good: Such transactions accelerate the early adoption and ecosystem building of enterprise AI tools to some extent.
- The Bad: They obscure real customer demand, leading to misjudgments about the actual monetization potential of AI.
- The Ugly: They could trigger a bubble similar to the subprime mortgage crisis, with massive capital circulating in closed loops without creating real business value.
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