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AI startup valuations raise bubble fears as funding surges
AI startup funding has surged globally, but heightened valuations and early-stage earnings gaps are raising bubble-risk concerns among investors.
Global venture-capital investment in artificial intelligence firms continues at record levels, with data showing AI startups raised ~US$73.1 billion in Q1 2025, accounting for nearly 58 % of all VC funding. Senior investors—including GIC’s CIO—warn that many early-stage firms with minimal revenue are fetching sky-high valuations just because they carry an “AI” label. The concern is that while infrastructure and model-play firms show promise, the broader wave may be driven by hype. The return path and exit horizon remain less clear, raising caution among disciplined investors.