Glossary
Circular deal
An arrangement in which a supplier invests in or lends to a customer that then spends the money on the supplier's products.
A deal is described as circular when money flows in a loop: for example, a chip or cloud company invests in an AI company, which then uses that money to buy the investor's chips or cloud services. Vendor financing, where a seller helps fund its buyer's purchases, works similarly.
Such arrangements can help customers grow quickly and secure supply. Critics argue they can make demand and revenue look stronger than independent spending would, and concentrate risk if the customer cannot keep paying.
"Circular" is a description, not a finding of wrongdoing. The question is how much of the revenue each side reports depends on money the other side supplied.
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