Circular relationships among AI firms

Jon Frost, Rudraksh Kansal, Kumar Rishabh, Vatsala Shreeti and Leanne Si Ying Zhang

No 137, BIS Bulletins from Bank for International Settlements

Abstract: Between 2021 and 2025, 28.7% of artificial intelligence (AI) firms’ investment deals (by deal value) involved a target company that was also an AI firm, while 55.2% of incoming investments in AI firms came from other AI firms.Of all the AI-to-AI investment deals between 2021 and 2025, 16.1% (by deal count) and 46.4% (by deal value) also involved commercial supply chain relationships between the investor and target firms.Circular investment relationships reflect key economic features such as the need to secure critical inputs and the presence of information asymmetries, yet they entail macroeconomic risks and increase opacity.

Pages: 8 pages
Date: 2026-10-01
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