The AI ecosystem is becoming tightly interwoven

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Something remarkable is happening beneath the surface of the AI boom. What began as a race to ship clever chatbots has turned into something far more serious. In the past year an industrial machine has taken shape, built on energy hungry data centres, specialist chips, firm power contracts and very large pools of private capital. It is no longer about a few neat products. It is about the physical and financial backbone of a new era of computing.

I have watched this shift at close quarters. A few years ago the noise was all about model breakthroughs and glossy demos. Today the real contest is over who controls the pipes that feed AI’s appetite for compute, energy and data. Deals worth hundreds of billions are being struck to secure access to infrastructure that did not exist five years ago. The scale is unlike anything in technology since the early internet, and the tempo keeps rising.

The result is a system that is pulling in on itself. A small group of firms now sits at the centre, tying chips, cloud and capital into a tight web of mutual reliance. That concentration brings immense influence, but it also creates fragility. One problem in the wrong place can ripple everywhere. Which is why the AI ecosystem is becoming tightly interwoven.

CHART 1 • The AI ecosystem is becoming tightly interwoven

A small cluster of companies now dominates the infrastructure, financing and delivery of advanced AI, creating a network of dependencies that spans chips, cloud, capital and software. This map of relationships between OpenAI, Nvidia, Microsoft and their partners reveals just how concentrated and interconnected the ecosystem has become.

Nvidia, valued at $4.5 trillion, sits at the centre, supplying chips to Oracle, CoreWeave and Microsoft while agreeing to invest up to $100 billion in OpenAI. Oracle has struck a $300 billion cloud deal with OpenAI and spends tens of billions on Nvidia hardware. AMD is set to supply 6 gigawatts of GPUs to OpenAI, with an option for OpenAI to buy up to 160 million AMD shares. Microsoft provides services, while a cluster of smaller AI firms orbit around these giants.

This concentration of compute, capital and strategic deals creates immense power but also fragility. A disruption to any key node could ripple through the entire network.

Source: Market Sentiment

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