Artificial Intelligence investment has been a major force in shaping the market, with capital expenditure expanding beyond traditional investment methods. This includes complex financial arrangements such as vendor and circular financing, which are increasingly prevalent.
This reliance on leverage and circular financing models is a significant indicator of a market nearing its mature phase. Such a financial landscape suggests a heightened level of risk, particularly for newer market participants and companies with undiversified business portfolios.
The current market dynamics, characterized by these sophisticated financing structures, highlight a critical period for investors to assess potential vulnerabilities. Companies that fail to adapt or diversify may face substantial challenges as the market evolves.