AI startup cloud deals by Microsoft, Google and Amazon ring ‘accounting alarm bells’ across Silicon Valley over revenue ‘round-tripping’

• Big Tech firms are investing in AI startups in exchange for commitments to use their cloud services.
• Some investors question whether these arrangements are artificially juicing cloud revenue growth.
• Accounting rules have gray areas, making it hard to find out how exactly the revenue is recognized.

When Microsoft announced a multibillion-dollar investment in OpenAI earlier this year, the deal made Azure the ChatGPT-maker’s “exclusive cloud provider.”