VC money pouring into AI at bubble levels even VCs are admitting it

[Zidane]

Its interesting looking at how venture capital money is pouring into AI at a pace that even a lot of VCs themselves are calling a bubble, and the concentration of that money is what really stands out to me

A huge share of global VC funding is now going almost entirely into AI, and within that AI share an outsized chunk goes to just a handful of names like OpenAI, Anthropic and xAI, with OpenAI alone pulling in over a hundred billion in a single funding round earlier this year at a valuation north of 800 billion

Even people running these venture funds are openly admitting its a bubble while still pouring money in, theres a quote floating around from a General Catalyst exec basically saying bubbles are good because they concentrate talent and capital in one place even if some of it gets wasted

The flip side of all this is the huge number of loss making AI startups that have seen their valuations soar just by being adjacent to the hype, which is exactly the kind of pattern that historically ends messily once the funding environment tightens even slightly

Its also worth noting how little of this money is actually reaching the wider startup ecosystem, strip out the top three or four companies and the remaining thousands of AI startups are apparently splitting a relatively small fraction of the total, so this bubble if it is one is extremely narrow at the top

Feels like the classic setup where a small number of companies could either become the next generation of tech giants or become extremely expensive cautionary tales depending entirely on whether the revenue eventually catches up to the valuations

Ai Bubble Venture Capitalwww.nytimes.com

[Northernah]

A VC exec saying bubbles are good is such a wild thing to say out loud, feels like an admission that theyre gambling with other peoples money and just hoping to be out before it pops

[Taker04]

The concentration point is the one that gets me, if three or four companies are hoovering up the vast majority of AI VC money then this isnt really a broad bubble its more like a very narrow and very expensive bet

[Quiet Forge]

OpenAI's valuation climbing that fast on paper doesnt mean much until they actually go public and the market gets to weigh in properly, private valuations can be pretty detached from reality

[LastMike47]

I think the bubble language gets thrown around too easily now, there is real revenue growth happening at some of these companies even if the valuations still look stretched

[Holly78]

Every cycle has people saying this time its different and every time some of it turns out true and some of it turns out to be exactly like the last bubble, hard to know which parts apply here

[Laura94]

The thousands of smaller AI startups splitting scraps while three companies eat the whole pie is going to create a lot of failed companies once funding tightens even slightly

[VB]

Feels like this is less about AI being useless and more about the money moving faster than the actual proof of business models catching up, thats a timing problem not a technology problem

[ProperJobs]

Historically when VCs openly admit something is a bubble while still participating thats usually a pretty late stage signal, not an early one