"But I've been thinking about growth spurts lately, because in AI there are a lot of them right now-capital throughout this year has quickly been cascading into a real but simultaneously select number of companies, with eyebrow-raising valuation jumps to boot. There are the examples you've perhaps heard of, companies on which much digital ink has been spilled."
"And this isn't inherently bad, to be clear-often, multiple rounds in a year is an indication of serious growth and traction. But there are factors in this equation I find myself worried about: The startups, for example, valued in the tens of billions that aren't too big to fail as the bubble deflates and AI spending retracts. And the sheer fact of capital, that there's more money sinking into these companies than was imaginable during the dotcom boom."
Capital has rapidly concentrated into a small number of AI companies, producing sharp valuation jumps and multiple funding rounds within a year. High-profile examples include Anthropic and Cursor, with valuations leaping from billions to tens or hundreds of billions. Numerous other startups have also raised multiple times through 2025, signaling growth and traction for some. Simultaneously, intense capital flows raise concerns about overvaluation and fragility if AI spending contracts. Some startups valued in the tens of billions may not be large enough to be safe as a market correction occurs. Venture investing remains a game of a few big winners and many losers.
Read at Fortune
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