A 'shakeout' in early-stage AI may be coming as VC money gets pickier on valuations
Investors should keep an eye out for excessive valuations and focus on productivity when it comes to investing in AI companies, market watchers say.
TL;DR
- Investors are advised to focus on productivity growth in AI companies due to potentially excessive valuations.
- A 'shakeout' is expected as investors become more discerning about where AI creates genuine value versus just being a feature.
- Capital is likely to become more selective in the next six to 12 months.
- While many AI companies are receiving investment, not all with AI in their pitch decks deserve high valuations.
- The winners will be companies using AI to solve expensive and highly complicated problems.
- Infrastructure created during the AI boom is expected to be used and prove game-changing, even if a bubble bursts.