Silicon Valley's AI Gold Rush: Overpaying for Potential or Good Investments?

By
Yulia Kuznetsova
1 min read

A New York venture capital firm passed on the opportunity to invest in Scale AI due to its $14 billion valuation, twice what it raised previously. Many venture investors are feeling the pressure to capitalize on the AI boom, leading to overpaying for startups lacking in solid business models. The rush to build AI portfolios and overvaluation is causing stagnation in valuations in other sectors. Investors are backing companies at earlier stages, but concerns about sustainability and profitability persist. Despite the transformative potential of AI, there is uncertainty about where VCs can make money in this landscape.

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