Circular chip financing
reinforcing loop · 4 steps · Trace on the map →
The cycle
- Chipmakers finance their buyers
- Neoclouds and labs buy chips
- Chipmaker revenue risesChip and memory supply
- Higher valuations fund more financing
What drives it
Chipmaker guarantees and equity let labs and neoclouds buy chips. The purchases become chipmaker revenue, which supports the valuation that pays for more financing.
What breaks it
Higher interest rates hit every link at once. It happened twice in 2026: Nvidia’s credit default swaps spiked in July, and on 16 October CoreWeave and Nebius each fell about 12%.
What to watch
Neocloud bond yields. Share of chip sales financed by the seller.