VCs tighten filters as AI investment mania intensifies

Artificial intelligence (AI) startups may be the brightest stars in the venture capital universe these days, but the glow is beginning to blind some investors. Even as early-stage funds continue to pour record amounts into the sector, several venture capitalists (VCs) are quietly stepping back, wary of inflated valuations, weak monetisation plans, and untested business models.

“Many AI companies are putting forward high valuations, yet in several cases, their strategies for monetisation and long-term sustainability remain unclear,” Milan Sharma, founder and managing director of 35North Ventures, told FE.