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OpenAI is funding a division of a venture capital company that has secured billions in financial support. Although this action is presented as a partnership focused on artificial intelligence (AI) developments, some people believe these “circular deals”—where AI businesses or associated investors and infrastructure firms continuously invest in one another’s stocks or enter into agreements—lead to exaggerated company values or revenue numbers.

◇OpenAI Secures a Share in an Investment Company

On the 1st (local time), OpenAI revealed its investment in **Scribe Holdings**. Moving ahead, OpenAI intends to integrate research, product, and engineering teams into Scribe’s subsidiaries to improve operational efficiency and service standards. Brad Lightcap, OpenAI’s Chief Operating Officer (COO), remarked, “This collaboration highlights the potential to transform business operations and customer interaction when advanced AI research and implementation are swiftly applied throughout an organization.” OpenAI has not revealed the size or value of its stake in Scribe Holdings.

This agreement has once more brought focus to the topic of “circular transactions” within the AI sector. This is due to the fact that OpenAI has received funding from the parent company of Scribe Holdings, which now owns a share in OpenAI. Scribe Holdings is an organization formed in April by the venture capital firm **Scribe Capital**. As reported by Reuters, the company is following a plan to purchase conventional businesses, such as IT service companies, and enhance their performance using AI technology. It has secured over 1 billion dollars so far, providing a range of services and currently supporting more than 10,000 clients.

Scribe Capital has poured hundreds of billions of dollars into OpenAI throughout the years. According to Bloomberg, the company initially invested in OpenAI in 2023 with a valuation of around 27 billion dollars (39.7 trillion South Korean won), and subsequently headed a 6.6 billion dollar (9.7 trillion South Korean won) funding round, which valued OpenAI at 157 billion dollars (230.9 trillion South Korean won)—exceeding expectations in the market at that time.

CNBC, a U.S. financial channel, stated, “This investment introduces another round of transactions to OpenAI’s collection.”

◇Frequent Circular Transactions

This is not the first instance of a circular transaction involving OpenAI. In September, the company also entered into a similar arrangement with **NVIDIA**. According to the agreement, NVIDIA’s investment of 100 billion dollars in OpenAI would mainly be used to rent NVIDIA’s graphics processing units (GPUs). A comparable partnership exists with **AMD**. As per a contract signed in October, OpenAI will receive a total of 6 gigawatts (GW) of AI chips from AMD, and OpenAI obtained the right to buy AMD common shares at 0.01 dollars each. Both parties intend to increase AMD’s stock price through collaborative announcements, enabling OpenAI to acquire AMD’s AI chips at higher valuations.

Other firms adopt comparable approaches. Following Google’s substantial financial commitment to the AI company **Anthropic**, Anthropic utilized the capital to acquire Google Cloud services. Similarly, NVIDIA also supports businesses that extensively utilize its GPUs.

Bloomberg stated in October that “some analysts are still doubtful about the circular transactions created by AI leaders.”