AI Startups: Boom or Bubble? The Billion-Dollar Gamble

If you want funding for your startup, just add “AI” to your pitch. Don’t believe me? 80% of Y Combinator’s startups did exactly that last year, and investors poured $110 billion into AI ventures.

Venture capitalists have one obsession: AI. A third of all global VC funding last year went into AI startups, with giants like OpenAI ($6.6B) and Databricks ($10B) leading the charge. But here’s the kicker: most of these startups won’t survive.

The AI hype is driving blind investments, where founders shoehorn AI into ideas just to attract capital, while investors fear missing the next big thing. The real winners? Likely chipmakers like Nvidia and infrastructure players, not the thousands of AI startups scrambling for relevance.

History tells us bubbles pop, but is AI different? Will this VC frenzy fuel the next tech revolution, or are we repeating the mistakes of the dot-com era?

Read the full article on Sherwood.

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