"The AI boom is only just beginning - and it may prove the most lucrative cycle in venture-capital history, even as it also leaves behind a wave of startups. That's according to Mel Williams, cofounder and partner at TrueBridge Capital Partners, a fund-of-funds manager with $8 billion under management that has backed firms such as Founders Fund, Thrive, and Sequoia. While VCs pick startups, Williams' job is to pick the VCs - giving him a rare, ecosystem-wide view of what's coming. His outlook: AI will create enormous value over the next decade, but a number of startups won't make it out alive."
"Williams described the early-stage AI environment as overheated. Founders with the right résumés - often with experience at OpenAI or top labs - can raise massive rounds at lofty valuations with little proof their product works. "At the earlier stages of the formation stages, where there's less evidence of a product market fit, you do see founders with credibility, founders who could check a couple boxes raising large pools of capital at very high valuations," he said."
AI adoption is entering an early but rapidly accelerating phase that could become the most lucrative cycle in venture capital history while eliminating many startups. Massive value creation is expected over the next decade, concentrated in a handful of dominant companies. Early-stage AI dealmaking is overheated, with founders who carry top credentials able to raise large rounds at high valuations despite limited product-market fit. Growth-stage investments show more discipline, with valuations aligning closer to public-market metrics as revenue becomes the focus. The dynamic will amplify venture's power-law outcomes, increasing returns for winners and losses for many others.
Read at Business Insider
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