Investigate Circular Spending Deals Across the AI Supply Chain

Federal policymakers must use their federal authority to investigate circular spending deals, clearly demarcating where deals turn from a sound investment strategy into a fraudulent round-tripping transaction,1 “a term regulators have used for sham trades with no economic substance that are designed to inflate reported results.”2

Strong example

Senators Warren, Blumenthal, Van Hollen, and Smith pressed the chair of the Financial Stability Oversight Council to launch a formal investigation into the financial stability risks posed by debt markets in the AI infrastructure buildout.

  1. Alix Dunn, “Are AI Companies Cooking the Books?” (podcast), Computer Says Maybe, September 30, 2025, https://www.themaybe.org/podcast/are-ai-companies-cooking-the-books-w-sarah-myers-west. ↩︎
  2. Sam, Dottle, Ghosh, and Kim, “A Guide to the Circular Deals.” ↩︎