Introduction: The Throne is Shaking

For nearly three years, the artificial intelligence landscape has felt like a monarchy. Since the “ChatGPT moment” of late 2022, OpenAI has sat comfortably on the throne, its dominance unquestioned, its brand synonymous with the technology itself. We lived in a unipolar world where Sam Altman was the kingmaker and “GPT” was the only acronym that mattered.

But as we stand here in late November 2025, the air has changed. The monarchy is dissolving into an oligarchy—a messy, expensive, and fiercely competitive street fight. The narrative of OpenAI’s invincibility has been punctured, not by a single catastrophic failure, but by a steady accumulation of hairline fractures that have finally become impossible to ignore.

The most telling blow came just days ago, on November 18th. It wasn’t a technical failure or a PR scandal. It was a deal—a quiet, colossal reshuffling of alliances that saw Microsoft and Nvidia, the very architects of OpenAI’s rise, throw a staggering $15 billion behind OpenAI’s primary rival, Anthropic.

This isn’t just business diversification; it is a signal that the era of the “One True Model” is over. We are entering a new phase of the AI economy—one defined by circular economics, massive debt, and a frantic game of musical chairs among the tech giants.

The “Circular” Deal: A $45 Billion Merry-Go-Round(OpenAI’s Imperial Phase)

To understand why the “dominant façade” is crumbling, we have to look at the mechanics of this new deal between Anthropic, Microsoft, and Nvidia. On the surface, it looks like a standard investment round. Under the hood, it looks like financial engineering on a planetary scale.

Here is the breakdown of the arrangement that has industry analysts and antitrust regulators raising their eyebrows:

• The Inflow: Microsoft and Nvidia have jointly invested $15 billion in cash and credits into Anthropic.
• The Outflow: In a synchronized quid pro quo, Anthropic has committed to spending $30 billion on Microsoft’s Azure cloud infrastructure, which runs on—you guessed it—Nvidia chips.

This is what The Economist and financial skeptics call the “Circular AI Economy.“

In this closed loop, money doesn’t necessarily flow from customers to businesses; it flows from investors to startups, who then hand it right back to the investors in the form of cloud service fees. Microsoft writes a check to Anthropic; Anthropic hands the check back to Microsoft’s Azure division; Microsoft books it as “cloud revenue,” and its stock price goes up. Nvidia supplies the chips for that cloud, and its revenue goes up. Anthropic gets a massive valuation bump, and its “war chest” grows.

Everyone looks like a winner on the balance sheet. But this circularity exposes a fragility in the market. If the revenue growth of the biggest tech companies depends on their funding the very startups that pay them, are we looking at organic demand, or are we looking at a subsidy-driven bubble?

Microsoft’s Hedging Strategy: The “Open Relationship”

For years, Microsoft and OpenAI were the ultimate power couple. Microsoft’s $13 billion bet on OpenAI in 2023 was the move that kick-started the generative AI boom. But marriages in Silicon Valley rarely last forever, especially when one partner becomes too dependent.

The cracks in this relationship have been forming for months. Open AI’s insatiable hunger for compute—culminating in their projected $1.4 trillion spending roadmap—has put immense strain on Microsoft’s coffers. Furthermore, OpenAI’s shift from a non-profit research lab to a commercially aggressive entity has created governance friction.

By leading this massive investment into Anthropic, Satya Nadella is sending a clear message: Microsoft is no longer an OpenAI company; Microsoft is an AI platform.

This is a classic “hedge.” If Open AI stumbles—whether due to safety failures, regulatory caps, or simply hitting a wall in model performance—Microsoft now has a front-row seat on the Anthropic rocket ship. They have effectively commoditized the “intelligence” layer. Whether you use ChatGPT (OpenAI or Claude (Anthropic), you are likely running on Azure. Microsoft has positioned itself as the casino owner: they don’t care which player wins the hand, as long as everyone is playing in their house.

Nvidia: The Arms Dealer of the AI Cold War

If Microsoft is the casino, Nvidia is the gravity that holds the building together. This deal further cements Jensen Huang’s company as the singular, unavoidable chokepoint of the global economy.

The circular nature of the Anthropic deal benefits Nvidia perhaps more than anyone else. When Microsoft invests in Anthropic to use Azure, Microsoft must buy more H-series and Blackwell chips from Nvidia to fulfill that compute demand.

Nvidia’s involvement in this “round-tripping” financing has drawn scrutiny from the Federal Reserve and the DOJ, who are wary of “inventory bubbles”—where chips are sold to startups backed by Nvidia itself. However, from a strategic standpoint, it makes Nvidia invincible. They are funding the demand for their own product.

In 2025, we are seeing Nvidia transition from a hardware vendor to a sovereign power. They are not just selling shovels during a gold rush; they are financing the gold miners to ensure the rush never ends.

Anthropic’s Rise: The “Adult in the Room”

Why Anthropic? Why is this the wedge driving Microsoft away from exclusive fidelity to OpenAI?

Anthropic, founded by former OpenAI safety researchers (the Amodei siblings), has successfully branded itself as the “adult in the room.” While OpenAI has been plagued by boardroom coups, high-profile departures (including Ilya Sutskever), and a frantic “move fast and break things” culture, Anthropic has projected stability.

Their flagship model, Claude, has quietly become the preferred tool for enterprise and coding. While OpenAI chased the consumer imagination with Voice Mode and Sora (video), Anthropic focused on context windows, reasoning reliability, and safety guardrails.

The market has shifted. In 2023, the “wow factor” was enough. In 2025, enterprises want reliability. They want models that don’t hallucinate, models that can ingest entire legal libraries (thanks to massive context windows), and models that don’t suffer from “lazy” coding habits.

By securing backing from both Amazon (their original major patron) and now Microsoft/Nvidia, Anthropic has achieved a level of neutrality that OpenAI lacks. They are the Switzerland of AI—neutral, safe, and funded by everyone.

The Commoditization of Intelligence

The deeper “crack” in OpenAI’s façade is the realization that intelligence is becoming a commodity.

In 2023, GPT-4 was miles ahead of anything else. It was magical. Today, the gap between GPT-5, Gemini 3 (Google), and Claude 3.5/4 (Anthropic) is negligible for most users.

• Google: After a clumsy start, Google’s Gemini 3 has integrated deeply into the Android and Workspace ecosystem. It doesn’t need to be better than GPT; it just needs to be everywhere.
• Meta: Mark Zuckerberg’s “scorched earth” strategy of open-sourcing Llama has flooded the market with free, high-quality models. Why pay OpenAI $20/month when you can run a Llama model locally or cheaply via API?
• Anthropic: As discussed, they have captured the “smart/safe” niche.

OpenAI is losing its moat. When five different companies offer “God-like” intelligence, the price of that intelligence drops to zero. OpenAI is forced to compete on brand and user interface, which is a much harder battle than competing on raw technological superiority.

The “Bubble” Question and Regulatory Heat

We cannot discuss this circular deal without addressing the elephant in the room: Is this a bubble?

The economy of 2025 is showing signs of strain similar to the Dot-Com era of 2000. We have:

• Massive valuations based on future promises ($157 billion for OpenAI, $60 billion for Anthropic).
• Revenue that is largely recycled (investors paying startups to pay investors).
• A disconnect between CAPEX (capital expenditure on chips/power) and actual revenue generation from AI software.

The “circular” deal between Microsoft, Nvidia, and Anthropic is essentially a way to keep the music playing. If startups stopped buying cloud credits, Microsoft’s growth would slow. If Microsoft’s growth slowed, it would stop buying Nvidia chips. If Nvidia slowed, the entire stock market (which is heavily weighted toward tech) would shudder. Regulators are watching. The Federal Trade Commission (FTC) and the UK’s CMA are already probing these “quasi-mergers.” They argue that Big Tech is using these investments to bypass antitrust laws—effectively acquiring these startups without formally buying them, thus avoiding regulatory blocks while still controlling the market.

The Cost of “God”

Finally, the cracks in OpenAI are financial. The sheer cost of training “frontier models” has become astronomical.

The Economist reports that OpenAI has committed to a spending plan that rivals the GDP of a G7 nation. Training GPT-5 and its successors requires gigawatts of power and acres of silicon.

In the early days, OpenAI could burn cash because they were the only game in town. Now, they are in a price war. Google can subsidize Gemini with Search ads. Microsoft can subsidize Copilot with Office 365 subscriptions. Meta burns cash for fun.

OpenAI, despite its revenue, is still fundamentally a startup burning furniture to keep the house warm. They must raise money constantly. This desperation strips them of their independence. They are beholden to their financiers in a way that Google and Meta are not.

Conclusion: A Multipolar Future

The deal between Anthropic, Microsoft, and Nvidia is not just a business headline; it is the tombstone for the “OpenAI Monopoly.

“We are not witnessing the death of OpenAI—far from it. They remain a powerhouse with arguably the best consumer product in history. However, we are witnessing their “normalization.” They are descending from the clouds to join the mud fight with everyone else.

The future of AI will not be defined by a single, dominant AGI that rules us all. It will be a messy, circular, multipolar ecosystem where:

• Hardware is King: Nvidia wins regardless of the software victor.
• Cloud is the Battlefield: Microsoft and Amazon use AI as a lure for cloud contracts.
• Models are Commodities: Intelligence becomes cheap, specialized, and abundant.

The façade has cracked, revealing the complex machinery behind it. The magic is gone, replaced by the brutal, fascinating reality of industrial capitalism. The AI revolution is no longer a crusade; it is a business.

Deep Dive: The Mechanics of “Round-Tripping” in 2025

To fully grasp the implications of the Microsoft/Anthropic/Nvidia deal, we must explore the
economic concept of “Round-Tripping” in the context of the modern AI industry.

What is Round-Tripping?

Historically, round-tripping referred to companies selling assets to one another to inflate
revenue volumes without generating real economic value. In the 2000 dot-com crash, fiber
optic capacity was often swapped between telecom companies to boost sales figures.
In 2025, AI, the mechanism that is more sophisticated but spiritually similar:

1. Cloud Giants (Microsoft/Amazon/Google) have immense cash reserves but need to
   show growth in their Cloud Divisions (Azure/AWS/GCP).
2. AI Labs (OpenAI/Anthropic/xAI) have immense “compute” needs but lack sufficient
   cash flow to pay for them upfront.
3. The “Investment”: The Cloud Giant invests cash (or “credits”) into the AI Lab.
4. The “Revenue”: The AI Lab is contractually obligated to spend that investment on
   the Cloud Giant’s servers.

Why is this dangerous?

It creates a “House of Mirrors.” If Microsoft invests $10B in OpenAI, and OpenAI pays $10BBackk to Microsoft for Azure, Microsoft records $10B in revenue. The market values
Microsoft at a 30x revenue multiple, adding $300B to its market cap.

• Real Cash Flow: $0 (The money just moved in a circle).
• Created Market Value: $300B.

This disconnect between value created and value perceived is what creates bubbles. The Anthropic deal, involving three parties (Nvidia adds the hardware layer to the circle), complicates this further, creating a “triangle of debt” that is harder to unwind.

The Cultural Shift: From “Magic” to “Utility”

Another crack in the façade is cultural. In 2023/2024, users treated AI with awe. They
posted screenshots of ChatGPT writing poetry or code, marveling at the “ghost in the
machine.”

By late 2025, that honeymoon is over. The “Vibe Shift” is palpable.

• Fatigue: Users are tired of “Slop”—low-quality, AI-generated content flooding social
  media and search results.
• Skepticism: The promise that AI would “cure cancer” or “solve climate change” has
  not materialized as quickly as the hype promised. Instead, we got better chatbots and
  automated spam.
• Utility over Personality: Users no longer care if the AI has a “personality” (a strength of
  OpenAI’s early RLHF). They care if it works. Anthropic’s “Artifacts” UI, which allows code
  and documents to be rendered side-by-side, was a utility-first innovation that stole market
  share from ChatGPT.

OpenAI’s brand was built on Magic. Anthropic’s brand is built on Utility. In a maturing
market, Utility usually wins.

The Talent Wars: The Brain Drain

The final crack is human. OpenAI was once the gravity well for every top researcher in the
world. If you wanted to build AGI, you went to the Mission District in San Francisco and
worked for Sam Altman.
That exclusivity is gone.

• xAI (Elon Musk): Has poached top talent by offering unlimited compute clusters
  (Memphis Supercluster) and a “no guardrails” research culture.
• Anthropic: Attracts the “safety-first” researchers who are disillusioned with OpenAI’s
  commercial pivot.
• Google DeepMind: Remains the home of academic rigor and fundamental
  breakthroughs (like AlphaFold).

The brain drain means OpenAI no longer has a monopoly on the future. The next great
breakthrough—whether it’s “System 2 thinking” (reasoning) or agentic behavior—is just as likely to come from a lab in London (DeepMind) or a converted Twitter office (xAI) as it is
from OpenAI.

Future Outlook: The Fragmentation

What happens next?

1. The Regulation Hammer Drops
The “Circular Deal” will likely be the catalyst for aggressive antitrust action in the US and
EU. We may see forced separations between Cloud providers and AI labs. If Microsoft is
forced to divest from OpenAI or Anthropic, the bubble could burst rapidly.
2. The Model Collapse
As AI-generated content floods the internet, training data becomes polluted. The
companies that have access to clean, human data (Proprietary data) will win. This hurts
OpenAI (which scraped the open web) helps companies with walled gardens (like Meta
with Instagram/Facebook data, or Google with YouTube/Drive).
3. The “Agent” Era
The battleground moves from “Chatbots” to “Agents”—AI that can take actions (book
flights, code apps, send emails). Microsoft is betting that by owning the OS (Windows) and the Office suite, it can integrate Anthropic’s agents better than OpenAI can integrate
from the outside.

The façade is down. The reality is here. It is messier, more expensive, and more competitive
than we ever imagined. And for the consumer, that is probably a good thing.

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