Jim Cramer warns AI industry's "circular financing" is out of control, says "I lived through 2000, I don't want to live through it again"
CNBC host Jim Cramer stated that the "circular financing" phenomenon in the AI sector is getting out of control, comparing it to the dot-com bubble of 2000. He pointed out that many companies rely on data center businesses for profitability, and if the market stops funding data centers, or if companies themselves lack funds, the difficulties of 2000 could recur. Wall Street's concerns are mainly focused on AI chip giants like NVIDIA, which announced a $500 billion partnership with South Korea's SK Group in late July to support AI infrastructure and is negotiating a $250 billion data center project with OpenAI. Moody's Analytics noted in a July report that the interdependence among AI labs, hyperscalers, semiconductor vendors, and sponsors has created a "circular system" that could obscure true demand.
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