How 'circular finance' can create a boom-bust bubble

AU Edition - Today's top story: Who's paying whom? The circular money machine behind the AI boom (or bubble)

October 14, 2026

AU Edition

 

Through our superannuation funds, we are all exposed to what happens on the stock market – whether in Australia, on Wall Street or around the world. So what may seem an arcane corner of the finance world matters for our retirement savings.

Take the financing of the AI build-out. In this strange world, more than half the funding for AI companies comes from other AI companies – whether chipmakers such as Nvidia, or the tech giants that own ChatGPT and Claude.

The same firms act as financiers, suppliers and customers of each other in a complicated and circular dance.

Their lofty valuations could come crashing down if real demand for AI products from business or consumers falls short of expectations. As finance experts Ruipeng Liu and Sagarika Mishra write, the current moment has echoes of the 1990s telecoms boom – before the bust.

 

Victoria Thieberger

Business and Economics Editor

 
 

Who’s paying whom? The circular money machine behind the AI boom (or bubble)

Ruipeng Liu, Deakin University; Sagarika Mishra, Deakin University

What’s not clear is how much of this AI boom is being driven by real, end-user demand — and how much might be a bubble.

Mental disorders are twice as common among victim-survivors of intimate partner violence

Megan Willis, Australian Catholic University

Yet victim-survivors often don’t or can’t access mental health care.

We can’t block a livestream, but Australia could ban execution footage from the US – to an extent

Victoria Fielding, Adelaide University

No country is an island when it comes to potentially harmful content online.

Should you watch a tiger mauling a man – or a live-streamed execution? We asked an ethicist

Jacqueline Boaks, Curtin University

We should pause and think about what we would want if our death was being filmed and our dignity or privacy were at stake.

Jim Chalmers warns progressives not to ‘mock’ One Nation voters

Michelle Grattan, University of Canberra

By directly acknowledging the seriousness of One Nation’s support, Chalmers is underscoring that the party is a threat to Labor, not just to the Coalition.

Introduced species aren’t good or bad. But when they slip from our control, we are quick to condemn them

Nancy Cushing, University of Newcastle

Pigs, camels, rabbits and many others were brought to Australia deliberately as valuable species. But we see them very differently once they become free-roaming.

When parents don’t see eye to eye: are differences in parenting styles a bad thing?

Trevor Mazzucchelli, Curtin University

When parents have different approaches to raising children, who’s right? Research suggests the answer matters less than how they handle their disagreements.

How young people do democracy: pausing, questioning, creating and bringing others along with them

Sarah Austin, The University of Melbourne

The second annual Shopfront Youth-Led Conference was designed by young people for young people. They wanted to talk about ‘redesigning success’.

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