Singapore — Artificial intelligence start-ups are attracting record sums of venture capital, but some of the world’s largest investors warned that early-stage valuations are starting to look frothy, senior investment executives said on Friday.
“There's a little bit of a hype bubble going on in the early-stage venture space,” said Bryan Yeo, group chief investment officer at Singapore sovereign wealth fund GIC, as part of a panel discussion at the Milken Institute Asia Summit 2025 in Singapore.
“Any company start-up with an AI label will be valued right up there at huge multiples of whatever the small revenue [is],” he said. “That might be fair for some companies and probably not for others.”
In the first quarter of 2025, AI start-ups raised $73.1bn globally, accounting for 57.9% of all venture capital funding, according to PitchBook. The surge was driven by funding rounds such as OpenAI's $40bn capital raising, as investors raced to catch the AI wave.
“Market expectations could be way ahead of what the technology could deliver,” Yeo said. “We're seeing a major AI capex boom today. It is masking some of the potential weaknesses that might be going on in the economy.”
Todd Sisitsky, president of alternative asset manager TPG , said the fear of missing out is dangerous for investors, though he added that views were divided on whether the AI sector had formed a bubble.
Some AI firms are hitting $100m in revenue within months, he said, while others in early-stage ventures command valuations at between $400m and $1.2bn per employee. He said that was “breathtaking”.
Reuters
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