RJ Hamster
Is the AI Bubble Inflating? Anthropic’s Massive Bet
| UnsubscribeTrump’s Next Ban – Coming January 19, 2026 (shocking) (From Banyan Hill Publishing)Anthropic Just Became AI’s Hottest Ticket—Backed by Microsoft and NVIDIAWritten by Chris Markoch on November 21, 2025 Key PointsAnthropic is committing $30 billion to Microsoft Azure, backed heavily by both NVIDIA and Microsoft.Analysts caution that the circular AI economy could be inflating expectations for high-valuation megacaps.The deal highlights intensifying competition in AI, raising pressure on smaller, less diversified players.Before NVIDIA Corp. (NASDAQ: NVDA) reported earnings on Nov. 19, the company got some bullish news. Anthropic, the host of the Claude AI large language model (LLM), announced it would commit $30 billion to use Microsoft’s (NASDAQ: MSFT) Azure cloud services.Here’s a quick breakdown of what each company gets out of the deal:Anthropic will spend $30 billion on Microsoft Azure, securing up to one gigawatt of compute capacity.NVIDIA plans to invest as much as $10 billion in Anthropic.Microsoft is committing up to $5 billion in new funding to support Anthropic’s growth.The only questionable aspect of this deal may be its timing. Almost immediately, some analysts criticized it as yet another example of the “circular” investment patterns emerging in the artificial intelligence (AI) buildout.Still, the strategic benefits for each party are clear:Anthropic strengthens its computing and distribution capabilities, boosts its valuation, and deepens ties with both Microsoft and NVIDIA.NVIDIA secures long-term demand for its AI chips through direct commitments from both Anthropic and Microsoft Azure.Microsoft expands its AI ecosystem beyond OpenAI, reinforcing its Copilot and enterprise AI product suite in the process.The AI stocks no one’s talking about (but institutions are quietly buying) (Ad)Everyone’s buying Nvidia. The financial media can’t stop talking about it. Your neighbor probably owns it. That’s exactly why I’m looking elsewhere. See, when everyone piles into the same trade, the easy money is already gone. The real profits come from finding what the crowd is missing.Click here to get your free copy of this reportBears See Concerns Over the AI Bubble Getting OverinflatedThe three-way deal is only the latest example of the circular AI economy, of which NVIDIA seems to be the only constant. However, bears would argue that deals such as this will expand already elevated expectations.But committing to spend money and actually spending it are very different. Right now, demand outweighs supply by a large margin. However, if that were to change, the air could come out of that bubble quickly. In that scenario, technology stocks like Microsoft and NVIDIA could face disproportionate risks.Now factor in that both stocks are considered overvalued, and it’s not hard to understand why these related-party transactions may carry more risk than reward.The Counterpoint: This Is a Race to the Winner’s CircleAnytime you see memes being made of something, there’s something humorous about it. That’s the case with the circular AI trade. Investors shouldn’t dismiss it, but they should put it into context.This isn’t a zero-sum game, but there will be winners and losers. Megacap companies like Microsoft and Meta Platforms (NASDAQ: META) are making these deals in an effort to create mutually reinforcing demand for each other’s products. That ensures that these companies will have a larger share of an AI market that is only expanding in size.Right now, there are many players in the AI space. That’s likely to change. The deal between Anthropic, NVIDIA, Microsoft, and other deals like it is like a game of musical chairs. It’s not that the funding will dry up, but the need for additional funding and additional players will slow down.That means the smaller, less diversified, or highly speculative AI companies face risks around capital access, customer concentration, and execution. That could leave them without a chair in this high-stakes game.NEW LAW: Congress Approves Setup For Digital Dollar? (Ad)Trump Ally Says Congress Approved the Setup for a Digital Dollar 2.0 But according to Rep. Marjorie Taylor Green, it’s a bill that contains “the entire setup, groundwork and infrastructure to move from cash to digital currency.”>>> Click Here before it becomes law.What This Means for InvestorsThese circular AI deals reflect a strategic land grab rather than a speculative frenzy. Yes, the numbers are staggering, and yes, valuations for companies like Microsoft and NVIDIA remain stretched. But these firms are not simply recycling capital to prop up narratives. They’re securing long-duration demand, locking in preferred partnerships, and reinforcing their competitive moats at a time when AI capacity remains scarce.Over the next several years, companies with the deepest pockets and broadest ecosystems will shape the AI infrastructure layer. Anthropic’s deal is another sign that the industry is consolidating around a handful of winners, and those winners are racing to capture the economic upside before the music slows.For investors, that means the opportunity isn’t necessarily in every AI stock. It’s in the platforms with the scale, capital, and customer reach to dictate the rules of the game.Read this article online ›Featured Stories:Cloudflare Just Broke the Internet, But It’s Still a Red-Hot Buy[Revealed] The $100 Starlink Pre-IPO Jackpot! (From Paradigm Press)Affirm Just Crushed Earnings—But Can It Outrun Klarna’s Scale?They’ve been wrong about options this whole time (From ProsperityPub)4 High-Risk Growth Stocks Under $15 to Watch This FallWalmart Stock Surges After a Solid Q3—Stronger Growth AheadMicrosoft’s AI Superfactory Could Power a Stock Rally Did you find this article useful? Thank you for subscribing to MarketBeat! 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