---
title: "Circularity & Virtuous Circle"
date: 2026-01-29
slug: circularity-virtuous-circle
summary: "'Circularity' vs. 'Virtuous Circle' - which one is more"
questionTitle: ""
tags: [AI, Capital]
readingTime: "1 min"
legacyUrl: /blog/f/circularity-virtuous-circle
linkedinUrl: ""
siteUrl: ""
audio: ""
---

![](/images/circularity-virtuous-circle.png)

"Circularity" vs. "Virtuous Circle" - which one is more believable?

The Bloomberg article offers sharp visual analysis and insights through a risk management lens. What is your reaction to the argument?
➡️ Near term: A **virtuous circle** seems more plausible because of scarcity (chips, power, labor, talent)
➡️ Long term: **Circularity** seems more plausible because of correlations (Bloomberg's visual makes this sharply clear, link in the comment)

From a risk management point of view: We are effectively stacking **counterparty risk on top of technology execution risk**. Today's brilliant capital allocation is simultaneously creating tomorrow's concentration risk.
 
The market prices AI on its growth potential. So based on the visual analysis, a risk manager would ask: **What could prevent a single point of failure?**
 
Because true diffusion depends on wide and sustained adoption, everyday users have to use this technology - consistently, and perhaps in perpetuity - to validate the multi trillion dollars capital stack.
 
Until then, concentration risk can be disguised as growth.
 
**Here is what matters**: Whenever you sit in boardrooms, startups, or simply as a thoughtful adopter, you have agency to support for resilience in growth. For example:
• As builders → How do you design for many customers?
• As buyers → How do you avoid single-vendor lock-in?
• As investors → How do you reward diversification?
• As adopters → How do you test multiple models?

**--------**  
**Clean Power Whisperer™ Perspectives**
Educational insights on risk, insurance, and capital for **AI • Energy • Climate**

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Link: Bloomberg, 2026 AI Circular Deals ([**https://www.bloomberg.com/graphics/2026-ai-circular-deals/](https://www.bloomberg.com/graphics/2026-ai-circular-deals/))**