I think the amount of turmoil around these deals is giving more weight to the possibility that we’re in a massive bubble thats quite divorced from any kind of fundamentals. Sooner or later the bubbles gonna burst.
Yes and no. Are AI companies overvalued? Yes. Will most of them crash and burn? Yes, they will. Are the words "intelligence" or "reasoning" misused? Absolutely. Nonetheless, nobody can deny that some of these tools are useful and have demonstrated they can generate revenue like no other tool, app, or device before. There is something different from the dot-com bubble; many barriers have come down since 2000. Everyone can be connected 24/7 for a few tens of dollars a month. People trust the internet as a medium to perform transactions and access data. The real bubble is in the private market valuations, especially in the pre-seed stage. Many young entrepreneurs don't understand that raising their first round at $30M, $50M, or even $100M post-money will put a heavy weight on their shoulders approaching the Series A. Raising a funding round is a promise you make to the market. Increasingly high expectations will burn many wanna be entrepreneurs whose contribution to make things better for everyone will be lost forever. I'm deeply convinced that the reality check for all those companies is the public market, and in today's world, you can't go public after 3-5 years if your initial valuation has been built on a 20-year-long promise. All the trillion-dollar companies we know today went public a few years after their creation: Apple, Google, Microsoft, NVIDIA, etc. OpenAI, Anthropic, and Cursor are black swans, not evidence of the power law.