How regulators should respond to the AI cloud credit loop of Microsoft, OpenAI, and other companies
What Regulators Should Do About The AI Industry's Hidden Financial Loop
AI summary
A large portion of Microsoft's $13 billion investment in OpenAI flows back in the form of Azure cloud infrastructure credits, which the authors call a "cloud credit loop," and say Google-Anthropic, Amazon-Anthropic, and Nvidia-CoreWeave have similar arrangements. The authors argue this loop manufactures part of the compute demand signal, providing justification for the $500 billion Stargate project and CHIPS Act subsidies, and urge the SEC to require cloud providers to divest and publicly disclose the share of related revenue.