AI VC Frenzy Inflates Valuations, Many Will Burn Capital
Truth about venture today We are in peak AI fomo. Growth trajectory drowns out legit durability concerns of most AI companies Family offices playing direct / co invest instead of funds, almost at any cost for top companies. Anthropic is the hottest asset of all time and fees are getting unethical. Vcs know the market is nutty but incentives matter; quick markups, easier raises, and get the right one and the inevitable failures don’t matter (or they do but it takes awhile). One anthropic and you are minted for 10+ years. Even lesser companies can king make someone. This is where irrational becomes rational. Companies growing 2-3x per year largely ignored if a 10x year isn’t clearly coming next. Benchmarks are completely distorted on what’s fundable.\ This is like the internet on steroids. Tech shift is real and it’s inevitable but investing behavior is similar to past cycle - too much, too fast. Winners will be 10-100x bigger but most investors will incinerate tons of capital hoping for the golden goose.