AST SpaceMobile (NASDAQ:ASTS) shares are surging 12% in midday trading today after the company and Canadian telecom giant Telus (NYSE:TU) announced a landmark agreement to deliver space-based cellular broadband service to Canada’s most remote regions.
Under the deal, Telus customers will soon use their existing smartphones for texts, calls, and data in areas without traditional towers, with the rollout targeted for late 2026. As part of the agreement, Telus will also invest in ground infrastructure and become an equity shareholder in ASTS, aligning their interests for the long term.
This transaction exemplifies a broader corporate equity investment boom that gained traction in 2024 and accelerated dramatically through 2025. While Big Tech poured billions into artificial intelligence — AI captured nearly 50% of all global startup funding in 2025, up from 34% in 2024 — the AST SpaceMobile-Telus pact proves the trend stretches far beyond Silicon Valley’s AI race.
Yet as these deals multiply, one nagging question emerges: Is much of this corporate equity investing simply a form of circular financing that could eventually cause the market to implode?
AI Megarounds Fuel the Frenzy
At the heart of the boom sit billion-dollar “megarounds” for foundation model laboratories. Companies such as OpenAI, xAI, Scale AI, and Anthropic alone accounted for more than 60% of total AI sector funding in 2025, according to industry analyses. These eye-popping sums have supercharged valuations and infrastructure buildouts at a pace never seen before.
Nvidia (NASDAQ: | NVDA Price PredictionNVDA) emerged as one of the most active corporate investors, deploying roughly $1 billion across more than 50 startups in 2024. The pace exploded in 2025 with a wave of mega-deals involving suppliers and ecosystem partners, a momentum that has carried into 2026. Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) have followed suit, writing large checks to secure strategic footholds in everything from cloud infrastructure to specialized AI applications.
The Spark for Circular Financing Concerns
It was Nvidia’s aggressive investment strategy that first ignited widespread debate about circular financing. The chipmaker has rejected the “circular” label, insisting its stakes are strategic bets on long-term growth. Yet skeptics point to the tight relationships: Nvidia pours equity into AI startups and suppliers, who in turn purchase massive quantities of its GPUs to train and run models. The result? Capital flows that appear to generate demand for the very products the investor sells.
Even the AST-Telus transaction fits a similar pattern in miniature: Telus takes an equity stake in ASTS while simultaneously committing to buy its satellite broadband services for Canadian customers. The telco’s investment is helping fund AST’s constellation, which then generates recurring revenue from Telus — creating a self-reinforcing loop that boosts both companies’ prospects on paper.
The Crash Risk: Real or Overblown?
Critics warn that widespread circular financing inflates asset prices without genuine end-user demand, setting the stage for a painful unwind. If AI adoption slows or economic conditions tighten, the artificial demand cycle could collapse, triggering valuation resets across interconnected players.
Even if the arrangements aren’t purely circular — many deliver real technological progress and new revenue streams — the sheer concentration of capital creates systemic risk. A handful of Big Tech balance sheets and a narrow AI theme now underpin trillions in market value. Any disruption could ripple far beyond the sector.
Key Takeaway
Every participant will insist with conviction that their investments are prudent, long-term strategic bets on genuine innovation, not circular schemes to inflate valuations. They’ll cite real breakthroughs, expanding markets, and committed customers. Yet the pattern in AI is now glaring: the same corporate giants spending hundreds of billions to build infrastructure are simultaneously generating — and capturing — most of the demand for that infrastructure. This closed loop doesn’t just reinforce itself; it distorts pricing, inflates input costs, and risks funneling trillions into a narrow technological bet.
The bubble may not burst tomorrow. With 2026 already off to a breakneck start, corporate equity and infrastructure spending could channel trillions more into this single megatrend. But history shows that booms built on interdependent, circular capital flows often unravel when true external demand disappoints.
The real test comes when cash flows from paying end-customers outside the echo chamber accelerate fast enough to justify the buildout. Until broad, profitable traction materializes beyond the current closed ecosystem, today’s valuations rest on fragile, self-reinforcing foundations that could crack under even modest setbacks. It will need real-world adoption to catch up and prove its resilience.
