Reuters: AI Startup Valuations Spark Bubble Concerns Amid Funding Surge

Artificial intelligence startups are attracting record venture capital investment, according to a Reuters report. However, some of the world's largest investors are expressing concern about inflated early-stage valuations within the AI sector, suggesting a potential bubble. Senior investment executives cited in the report warn that a "hype bubble" is forming in the early-stage venture space, leading to unsustainable "frothy" valuations. They observe that startups leveraging the "AI" label are commanding excessive valuation multiples relative to their limited revenues. PitchBook data indicates that AI startups secured $73.1 billion globally in the first quarter of 2025, representing 57.9% of all venture capital deployed. Investors caution that current market expectations may significantly exceed the current capabilities of AI technology.