The Bank for International Settlements published a Bulletin finding extensive overlap between investment and commercial relationships among artificial intelligence firms. Between 2021 and 2025, other AI firms accounted for 28.7% of the value of AI firms’ outgoing investments and 55.2% of their incoming investment. Among AI-to-AI deals, 16.1% by number and 46.4% by value involved firms that also had a supply chain relationship during the period. The analysis identified 972 intra-AI investment relationships across 1,246 firms. Most circular relationships involved an investor that also supplied the target, while compute and infrastructure providers originated 73% of such relationships. These arrangements can secure scarce inputs, support customers with large financing needs and reduce information and contracting frictions. The Bulletin warns that the structures can obscure underlying demand because supplier-financed customers may use that capital to purchase the supplier’s products. They can also expose firms to simultaneous investment losses and declining sales, allowing shocks to spread through financial and commercial channels. Monitoring is complicated by private firms’ limited disclosures, complex deal terms, off-balance-sheet guarantees, private credit and special purpose vehicles, as well as exposures spanning sectors and jurisdictions.
Bank for International Settlements finds circular AI investment relationships increase opacity and macroeconomic risks
The Bank for International Settlements found that circular investment and supply chain relationships are widespread among AI firms, accounting for 46.4% of AI-to-AI deal value between 2021 and 2025. While these arrangements can secure critical inputs and address financing frictions, they can obscure demand and amplify interconnected losses. Complex terms, limited disclosures and cross-jurisdictional exposures also make the risks difficult to monitor.