Let it Ride or Abandon Ship? Investors Watch Bubble Warning Signs As Megacap AI Boom Rolls On
Plus, what to make of the ruckus over SPVs & America's new national champion
The Week in Short
Anthropic is finalizing its new funding round and we have fresh info on their revenues. SPVs are having a moment, and VCs including Menlo Ventures and Lightspeed are using them, but Anthropic’s crackdown is a warning.
Behind the paywall: Anthropic, Cohere, Perplexity, and Runway are all seeing ARR surge, sources tell us. Vercel CEO Guillermo Rauch joins the Newcomer Podcast for a riff on all things vibe coding. President Trump wants a stake in Intel. Meanwhile, Stability AI bets on a Hollywood makeover. Meta’s AI divisions get a total overhaul.
The Main Item
Exclusive Numbers on Top AI Firms Show Demand Is Real & Investors Are Voracious. Stacked SPVs Offer a Warning Sign.
There’s very little debate among investors that we’re in some sort of a bubble when it comes to valuations for public and private tech stocks. It’s hard to see a company like Nvidia suddenly race out to a $4.5 trillion valuation and not think more than a few people at the rager will end up sick.
But where exactly we are in the process, and how much more money can be made on the way up, is unclear.
Sam Altman likely kicked off the bubble talk last week when he told a group of reporters at a dinner we were “in a phase where investors as a whole are overexcited about AI.”
Then there was a paper from MIT's Project NANDA, a program aimed at building networks of AI agents, with the glaring headline figure that 95% of AI pilot projects at companies provided them zero financial gain. Of course anyone who actually read beyond the headline would have seen that the problems enterprises faced were not with the quality of models or data security but poor integration with a company’s workflow.
Still, the jitteriness was enough to trim the sails of a white-hot tech market early in the week, with AI high riders like Nvidia and Oracle dropping a few points before coming back on Friday following Fed chair Jerome Powell’s Jackson Hole speech. Meta was down 5% this week largely on the news that it was restructuring its AI team and freezing hiring, though the argument that this was a bubble-bursting signal was a pretty bad misreading of a predictable reorg around new talent after an insane spending spree.
We spoke to sources in the AI world this week and got some exclusive financial details on the top companies, and we’re not seeing any hard markers right now that AI is wobbling as a business. The biggest AI startups are showing strong revenue gains, as customers both from the business side (Anthropic, Runway, Cohere) and individuals (OpenAI, Perplexity) continue to pay up.
Anthropic’s growth might be the best indicator that there’s some rationality in the irrational exuberance.
The company is finalizing a multi-billion dollar funding round that will value it at $170 billion — that’s up from around $62 billion just earlier this year. Almost tripling your valuation in the course of a few months sets an awfully high bar, but the company has shown the revenue growth to back it up.