OpenAI, Nvidia And Oracle Building A High-Tech House Of Cards? Expert Warns 'Infinite Money Glitch' Could Trigger AI-Led Job Losses And Market Chaos

A critical examination of the AI industry’s financial mechanics, dubbed the “AI Infinite Money Glitch,” is raising alarms among financial analysts and tech critics.

Gordon Johnson, CEO and Founder of GLJ Research, LLC, explicitly warns that the current AI boom is not only a potential “high-tech house of cards” but also an “excuse to eliminate millions of American jobs.”

AI’s Circular, High-Stakes Funding Loop

The “Infinite Money Glitch,” highlighted by Johnson in a recent analysis by Reef Insights, describes a circular flow of tens of billions of dollars between major players like OpenAI, Nvidia Corp. (NASDAQ:NVDA), and Oracle Corp. (NYSE:ORCL).

At its core, cloud computing giant Oracle purchases vast quantities of high-end AI chips (GPUs) from Nvidia and Advanced Micro Devices Inc. (NASDAQ:AMD) to build massive data centers.

OpenAI then commits to long-term contracts with Oracle to rent this computing power for its AI models. Simultaneously, OpenAI also strikes direct deals with chip makers like AMD, even securing stock warrants in exchange for future supply.

Symbiotic Deals Linking OpenAI, Oracle, And Nvidia

“The money flows in a circle,” Reef Insights explains, detailing how Oracle committed to buying $40 billion in NVIDIA chips for an OpenAI data center. This is reciprocated by Nvidia’s plan to invest up to $100 billion in OpenAI, tied to developing significant NVIDIA systems.

AMD similarly benefits, supplying OpenAI with chips totaling up to 6 gigawatts, in exchange for a warrant to purchase 160 million AMD shares—roughly 10% of the company.

Reef Insights argues this intricate web of mutual spending creates a system where “each one's revenue depends on another's spending,” with the entire edifice resting on the precarious assumption that “real users will pay enough for AI tools to support the whole system.”

See Also: Jeff Bezos, David Solomon And Now Sam Altman Warns Of A Brewing AI Bubble, But Expert Says ‘They Want The Bubble To Pop:’ Here’s Why

Critics Warn AI Boom Is A Jobs-Killer

Gordon Johnson, expressing a starker view on X, stated, “You left out the part where ‘AI’ is used as an excuse to eliminate millions of American jobs, while also exploding the cost those same Americans pay for electricity… Immigrants taking Americans jobs = bad. AI taking American jobs = good (somehow).”

Johnson’s comments underscore a growing concern about the economic and social implications of an AI-driven future where job displacement is a significant factor, potentially without a corresponding benefit to the wider populace.

How Can This Circle Break?

The “circle could break,” according to Reef Insights, if “OpenAI doesn't make enough money from its users.” A lack of real demand would leave Oracle with underutilized, expensive data centers and halt new chip orders for Nvidia and AMD.

This scenario draws parallels to the fiber-optic network overbuilding of the early 2000s, where significant investments led to a bust when anticipated demand failed to materialize. “Companies could be stuck with expensive obligations even as usage drops,” the analysis concludes, suggesting a rapid decline in profits and stock prices, transforming the AI boom into an “overbuilt cycle.”

Price Action

Here is a list of some AI-linked exchange-traded funds that investors can consider.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Wednesday. The SPY was up 0.13% at $669.97, while the QQQ advanced 0.16% to $605.45, according to Benzinga Pro data.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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