TSMC’s board approved a plan to invest up to $500 million in OpenAI preferred stock reserved for large investors. The chipmaker will also use another $500 million to purchase Anthropic common shares at the latter’s expected IPO price. This move gives the Taiwanese firm direct stakes in leading AI developers. It follows a period where its contract chipmaking business profited enormously from the AI data center buildout.
Circular financing concerns
The Wall Street Journal reported that such an investment may give markets "a shot of confidence as the artificial-intelligence trade shows signs of strain." Analysts warned, however, that circular financing among investors, suppliers, and customers makes it difficult to evaluate real market demand for AI-related hardware and services. TSMC physically produces the vast majority of Nvidia’s chips designed for AI data center workloads. It also makes most of Apple’s custom chips used in iPhones, Mac laptops, and desktops, plus Apple’s planned AI computing server. Most of these fabs are located in Taiwan, but TSMC operates plants in Japan and China, with an expanding US cluster in Arizona and a new fab under construction in Germany. Anthropic and OpenAI both purchase huge quantities of AI hardware manufactured by TSMC for their data center projects. So this announced investment fits into the broader trend of circular financing that has become common during the AI boom, even as tech stocks have gyrated recently because investors have grown increasingly jittery. I see no clear benefit here; the money simply flows back to the supplier who already profits from the hardware sales.
Financial context and scale
TSMC has plenty of money to spare on such a bet. Ongoing demand for AI-related chips enabled the company to report six consecutive quarters of record profit. The latest example is the company earning more than $23 billion in profit during the July through September 2026 quarter, according to Reuters. TSMC’s planned investment pales in comparison with circular financing deals from major US tech companies. The most notable example is Nvidia, which has invested $30 billion in OpenAI and $10 billion in Anthropic so far. Nvidia also put tens of billions of dollars into many other AI and robotics companies. These figures show that TSMC’s $1 billion commitment is modest relative to the giants it supplies. The chipmaker remains profitable despite the volatility in the sector. Investors should note that while the deal secures future supply relationships, it does not create new demand. The existing hardware sales already drive the bulk of TSMC’s revenue. Any additional stake in the AI labs is a financial hedge rather than a strategic necessity. The market reaction will depend on whether investors accept this circular structure as sustainable or view it as a sign of weakening organic growth.
