Venture Capital Valuations of AI Startups Surge and Raise Fears of an AI Bubble Forming
mrpg writes:
Artificial intelligence startups are attracting record sums of venture capital, but some of the world's largest investors warned that early-stage valuations are starting to look frothy, senior investment executives said on Friday.
"There's a little bit of a hype bubble going on in the early-stage venture space," said Bryan Yeo, group chief investment officer at Singapore sovereign wealth fund GIC (GIC.UL), as part of a panel discussion at the Milken Institute Asia Summit 2025 in Singapore.
"Any company startup with an AI label will be valued right up there at huge multiples of whatever the small revenue (is)," he said. "That might be fair for some companies and probably not for others."
In the first quarter of 2025, AI startups raised $73.1 billion globally, accounting for 57.9% of all venture capital funding, according to PitchBook. The surge was driven by funding rounds like OpenAI's $40 billion capital raising, as investors raced to catch the AI wave.
"Market expectations could be way ahead of what the technology could deliver," Yeo said. "We're seeing a major AI capex boom today. It is masking some of the potential weaknesses that might be going on in the economy."
Todd Sisitsky, president of alternative asset manager TPG said the fear of missing out is dangerous for investors, though he added that views were divided on whether the AI sector had formed a bubble.
Some AI firms are hitting $100 million in revenue within months, he said, while others in early-stage ventures command valuations at between $400 million and $1.2 billion per employee. He said that was "breathtaking."
And perhaps a case in point? . . .
Database Startup Supabase Notches $5 Billion Valuation in Funding Roundupstart writes:
Database startup Supabase notches $5 billion valuation in funding round - The Economic Times:
Open-source database startup Supabase said on Friday it has secured a valuation of $5 billion in its latest funding round, as investors continue to back companies riding the wave of the artificial intelligence boom.
[...] Supabase is a backend platform that helps developers build applications quickly and has benefited from the rise in AI-powered coding assistants.
The platform is built on the PostgreSQL open-source database, a system for organizing and managing information online.
The latest capital-raise comes just months after Supabase's Series D round, which reportedly valued it at $2 billion.
[...] Coding platforms such as Lovable and Bolt run on Supabase, which caters to more than four million developers. The company's customers also include enterprises such as PwC, McDonald's and Github Next.
"This new financing aims to accelerate Supabase's efforts to become the backend for everyone, from startups to some of the most demanding, data-intensive enterprise workloads," said Caryn Marooney, general partner at investment management firm Coatue.
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