Circular AI Deals Fuel Bubble Debate | Bloomberg Tech: Asia 11/28/25

AI Bubble Concerns & Sustainability - The report focuses on concerns about a potential bubble in the global AI industry, fueled by multibillion-dollar circular deals [1][3] - Questions arise regarding the sustainability of AI spending by Asia's tech players [2] - Nervousness persists despite efforts to downplay criticism, particularly concerning revenue justification for the AI revolution by 2030 [3][6] - Concerns exist about suppliers funding customers, customers investing in suppliers, and murky revenue-sharing agreements [4] - Some skeptics warn of an overdue correction, while others remain confident in AI's long-term potential, suggesting a bubble has merely gotten ahead of itself [10] Key Players & Strategies - NVIDIA is central, described as selling the "troubles" in today's AI job rush, engaging in mega-deals to invest in companies that buy its products [5] - SoftBank's AI exposure is examined, including its investments in OpenAI and massive data hubs, raising investor fears of potential backfire due to rising debt [16][17] - Foxconn's chairman addresses concerns about circular deals, emphasizing the potential for AI in manufacturing and daily uses, highlighting the demands are real [11][12] - Alibaba's CEO doesn't foresee an AI bubble forming in the next 2-3 years, believing resources for AI won't meet demand [36][37] Financial Implications & Market Dynamics - SoftBank sold its entire stake in NVIDIA for $58 billion to bankroll AI ambitions, amplifying market anxiety over an industry bubble [7] - Bloomberg Economics sees demand for Korean chips surging by 35% next year, almost twice the current clip [8] - Oracle's stock performance is noted, giving up gains made since striking a $300 billion deal with OpenAI, suggesting investors are penalizing the shift to AI [23] - OpenAI is committing over $13 trillion in the next few years, raising questions about the source of funding [27]