Circular Economies

𝐅𝐥𝐮𝐫𝐫𝐲 𝐨𝐟 𝐂𝐢𝐫𝐜𝐮𝐥𝐚𝐫 𝐃𝐞𝐚𝐥𝐬, 𝐰𝐢𝐭𝐡 𝐎𝐩𝐞𝐧𝐀𝐈, 𝐌𝐢𝐜𝐫𝐨𝐬𝐨𝐟𝐭 𝐚𝐧𝐝 𝐍𝐯𝐢𝐝𝐢𝐚 𝐭𝐡𝐞 𝐥𝐚𝐫𝐠𝐞𝐬𝐭... nodes in this network of Investments.

**This is a highly technical and descriptive article, written without the use of ai.

The Space, however “circular” it may seem, of course is a reflection of the wider economy as a whole. AI Adoption is absolutely happening, with consumers using these tools in a variety of ways.

``` Tangent to prove the idea of Value CreationThis reminds me of the “Economic Broken Window Paradox”, where a Brick hits a Barbershop window, thus setting off a cascade of economic events. The shopkeeper fixes the window by paying the glass manufacturer, the glass manufacturer hires someone to install it.The installer buys some screws and bolts.This flurry of investment starts with a single broken window. The paradox goes that we should break more windows...But of course that doesn’t take into account the other ways value can be increased, not just by fixing things that break, but by creating new Value in the society.```

Are these deals truly circular?

In part for sure. But overall they are creating value. For example, Microsoft investing money, wherein a part of the funds must be used on their own Cloud Infrastructure, seems to the untrained eye that the same funds are flowing ‘back’ to Microsoft. So did real value get created?

Similar to the broken window, imagine if the Glass Manufacturer went around breaking store-fronts. Or they paid the Barber to change his front-facade, but with a partnership to use their own Glass. You might think this is ridiculous. But does it make sense economically? Who benefits from such a transaction? Does the whole Villages economy somehow “lift”.

Similar to the law of entropy, that states “organic beings” break the law of entropy, because they show “negative-entropy”. But that’s only when we look at the Entity on its own. Zooming out, we see the overall system is in fact gaining entropy. The Sun Earth, Solar System combination isn’t somehow becoming more orderly.

With these economic deals, there is absolutely efficiency loss. Microsoft loses money in this process. But the idea is to invest in that hardware, and put it to use. We must zoom out over the entire economy, as consumers begin to use these tools. Similarly, we must zoom out temporally, wherein Microsoft is kick-starting an entire new industry.

Once AI model inference and training takes off, the consumers use these tools, and other AI companies compete with OpenAI, the Cloud Provider benefits huge.

Finally, is this a Circular Economy? Yes.

But that misses the point.

Is the whole pie growing?

Yes.