Artificial Intelligence, often called AI, has become one of the most exciting and fastest-growing fields in technology today. Around the world, investors are pouring billions of dollars into AI startups. These are young companies that build tools, systems, and products using AI. From writing software to making chatbots, creating robots, or designing smarter business tools, AI seems to be everywhere. But behind this excitement, some of the biggest investors in the world are beginning to worry. They believe that AI companies are being valued too highly and too quickly, raising concerns that a financial bubble may be forming.
At a recent panel discussion at the Milken Institute Asia Summit 2025 in Singapore, investors openly spoke about this issue. Bryan Yeo, who is the group chief investment officer at Singapore’s sovereign wealth fund GIC, made a strong remark. “There’s a little bit of a hype bubble going on in the early-stage venture space,” he said. By “hype bubble,” he meant that too much excitement is pushing the value of AI startups far beyond what they might really be worth. He explained further: “Any company startup with an AI label will be valued right up there at huge multiples of whatever the small revenue (is). That might be fair for some companies and probably not for others.”
His point is simple—investors are rushing into AI without always looking carefully at whether these companies can truly deliver. Just having “AI” in a company’s name is enough to attract money, even if the revenue or product is still very small.
Recent numbers prove how strong the rush has been. According to PitchBook, AI startups raised a record-breaking $73.1 billion in the first quarter of 2025 alone. That means almost 58% of all the money given to startups worldwide went only to AI companies. A huge part of this was because of massive funding rounds, like OpenAI raising $40 billion. This shows how investors, from small venture capital firms to giant funds, are eager to catch what many are calling the “AI wave.”
But there is a risk here. As Yeo put it, “Market expectations could be way ahead of what the technology could deliver. 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.” What he meant is that people are expecting AI to change everything instantly, but in reality, technology takes time to grow, improve, and prove its worth. While money is flowing into AI, other problems in the global economy may be getting hidden behind this shiny new trend.
Another well-known investor, Todd Sisitsky, the president of alternative asset manager TPG, also shared his thoughts. He warned that the “fear of missing out” could be dangerous for investors. This fear, often called “FOMO,” makes investors throw money into AI companies simply because they don’t want to be left behind. But this is risky. He pointed out that while some AI companies are reaching $100 million in revenue within just a few months, others—especially those still in early stages—are somehow being valued at $400 million to even $1.2 billion per employee. He said that was “breathtaking.”
His comment shows just how wild the situation has become. Imagine a small startup with only a few employees suddenly being valued at over a billion dollars. That may sound exciting, but it also shows the danger of over-expectation. If the company fails to perform or the technology does not work as expected, investors could lose massive amounts of money.
The story of AI funding today reminds many experts of past financial bubbles. History has seen similar situations, like the dot-com bubble in the late 1990s when internet companies were given sky-high valuations even without strong business models. At first, money kept flowing, but when reality struck, many of those companies collapsed, taking investors’ money down with them. Now, with AI being called the “next big thing,” there is a fear that history could repeat itself.
However, not everyone fully agrees. Some investors believe that while there is hype, AI technology is so transformative that it justifies the high valuations. After all, AI has already shown the power to write code, create art, drive cars, predict diseases, and improve productivity across industries. Supporters argue that investing early in such groundbreaking technology is worth the risk, even if valuations look inflated now.
But even then, caution is needed. Large funds and investors like GIC and TPG are warning others not to be blinded by the excitement. The difference between a smart investment and a dangerous gamble lies in careful evaluation. A startup that only has ideas without proof may not deserve billions, while one that is already showing results could be worth the risk.
The hype around AI is also changing the culture of startups. Many new businesses are adding “AI” to their names or marketing just to attract money. Investors, in turn, are racing to pick winners before someone else does. This creates a cycle where valuations climb higher and higher, sometimes without real business strength behind them. If this continues unchecked, the bubble may grow until it bursts.
For the ordinary person watching this news, the story teaches an important lesson. Just because something is popular does not mean it is always safe. Whether in technology, business, or even daily life decisions, excitement and fear of missing out can lead to mistakes. AI is powerful and will likely change the world in many ways, but it is still growing. Investors and companies need patience and wisdom, not just excitement.
In the end, the words of Bryan Yeo and Todd Sisitsky act as a reminder. AI may truly be the future, but even the future should not be bought at any price. Balancing hope with caution will be the key to turning this wave of AI into real progress, instead of another financial bubble waiting to burst.
