Dragosch: AI Hyperscaler Circularity Raises Bust Risks

André Dragosch argues the core issue in the current AI cycle is return on capital, not intelligence output, citing circular investments where hyperscalers such as Microsoft, Amazon and Google fund AI firms that then purchase compute from the same providers, alongside $2.3 trillion in remaining performance obligations half of which rests on OpenAI and Anthropic, and annual capex nearing $1 trillion financed increasingly by debt, patterns that echo 1997, 2000 and 2008 financing breakdowns.