AI's Closed Loops Are Tightening - Can Startups Thrive?

Closed AI Loops Are Concentrating Power - and Creating Room for Startups Yamini Kalra • December 5, 2025

When Microsoft, Nvidia and Anthropic formalized their latest partnership last month, Microsoft CEO Satya Nadella distilled the logic behind it into a single line: "We are increasingly going to be customers of each other."

It's arguably the best way to describe the latest tie-up in the artificial intelligence world. Anthropic would commit tens of billions of dollars to Microsoft's cloud. Microsoft and Nvidia plan to invest billions back into Anthropic. Nvidia will co-design hardware optimized for Anthropic's next generation of AI models, and Microsoft will distribute those models across Azure and its enterprise products.

The companies are, quite literally, buying from and reinforcing each other. And that closed circuit partnership sends a clear signal ...