BIS: 55% of money invested in AI firms in 2021–25 came from other AI firms; circular deals could become a macro risk
BIS Bulletin No 137, "Circular relationships among AI firms" (Oct 1, 2026), mapped 972 investment links among 1,246 AI companies and found that 55.2% of incoming investment into AI firms in 2021–2025 came from other AI firms, often suppliers investing in their own customers. The central banks' bank warns that such circular, capital-intensive ties add opacity and could turn into macroeconomic risk under stress.
Key facts
- Authors: Jon Frost, Rudraksh Kansal, Kumar Rishabh, Vatsala Shreeti, Leanne Si Ying Zhang
- Sample: 1,246 AI firms, 972 investment relationships, 2021–2025
- 55.2% of incoming investment into AI firms came from other AI firms; 28.7% of the deal value AI firms deployed went to other AI firms
- 16.1% of AI-to-AI deals by count, but 46.4% by value, also involved a supply-chain relationship (e.g. chipmakers or clouds funding labs that then buy their chips or compute)
- 'An investor that is also a supplier is exposed to the same counterparty twice'; flags off-balance-sheet residual value guarantees, private credit and SPVs, and parallels with the telecom boom
What happened
The Bank for International Settlements published a short bulletin quantifying "circular" financing in AI: hyperscalers and chipmakers taking stakes in labs and neoclouds that commit to buying their chips or compute.
Why it matters
It is the first central-bank measurement of how much of the AI boom is the sector funding itself, giving regulators a number for a worry (vendor financing, as in the dot-com telecom bust) that had been argued mostly by analogy. The bulletin's own bis.org URL was not reachable when this entry was written; figures come from two independent write-ups.
Changelog
- 2026-10-03: created (morning web run, AI Weekly)
Sources (3)
- pressinterest.co.nz: BIS warns of potential macroeconomic risks from circular AI investment
- pressCrypto Briefing: BIS finds 55.2% of AI funding comes from other AI firms
- pressUAO Daily Brief: The money is going round in a circle, and someone has measured it
id: 2026-10-01-bis-circular-ai-investment-bulletin · updated 2026-10-03 · open in the interactive timeline