The wave of artificial intelligence is sweeping through global capital markets—will it give rise to new tech giants, or will it lead to another bubble? According to the latest reports, the combined valuation of ten unprofitable AI startups has surged by nearly $1 trillion in the past 12 months, marking the fastest wealth expansion in history. These companies include OpenAI, Anthropic, xAI, Perplexity, Scale AI, Safe Superintelligence, Thinking Machines Lab, Figure AI, Anysphere, and Databricks. This year alone, they have attracted over $200 billion in venture capital funding, accounting for two-thirds of total U.S. VC investments for the year. However, they are nearly all operating at a loss. VCs Burn $200 Billion in Bets on AI The venture capital scene in 2025 has been ignited by AI. Data from PitchBook indicates that U.S. VCs will exceed $200 billion in investments in AI this year—far surpassing the $135 billion invested during the "software as a service (SaaS)" bubble in 2021. In contrast, at the peak of the internet bubble in the year 2000, funding for internet companies was only $10.5 billion (equivalent to about $20 billion when adjusted for inflation). Hemant Taneja, CEO of General Catalyst, candidly stated, “Of course, this is a bubble. But bubbles serve a purpose; they concentrate capital and talent on new trends. While it may bring chaos, it also incubates companies that can change the world.” AI Unicorns with “Distorted Valuations” In Silicon Valley, an AI company with annual revenues of just $5 million is now valued at $500 million—100 times its revenue. A top VC partner admitted, “Even in a zero-interest-rate environment, such companies would be valued at $250 million to $300 million. The current market feels like everyone is assuming they have invested in the next OpenAI.” Behind this “gamble” investment logic lies a collective FOMO (fear of missing out) mentality. Samir Dholakia from Bessemer Venture Partners expressed, “AI is a technology that can add a ‘zero’ to everything.” “Winner Takes All” Expectations Lucas Swisher, a partner at Coatue Capital, believes the AI landscape may mirror the patterns of the internet era—ultimately, only a very few companies will win. “Back then, Google and Meta almost monopolized the entire market. This time, it could be 15 companies instead of five.” Salesforce CEO Marc Benioff made it even clearer: “Perhaps $1 trillion of AI investment will be wasted, but ultimately AI will create ten times that value. The way tech innovation works has always been to throw money at it and see what sticks to the wall.” Spillover Risks: From Startups to Public Markets The valuation fluctuations of private AI companies are beginning to affect public markets. In recent weeks, giants such as AMD, NVIDIA, Broadcom, and Oracle have seen their market values soar by hundreds of billions of dollars due to partnerships with OpenAI. If these AI startups face cash flow issues, the cascading effects could drag down the entire tech sector. Although OpenAI has an annualized revenue of $13 billion, competition with Microsoft and Google keeps it locked in a cash-burning war. The costs of training the next-generation models are rising exponentially, while its profitability timeline remains unclear. Sebastian Mallaby, author of “The Venture Capitalist’s Path,” summarizes this spree in one sentence: "If we can achieve artificial general intelligence (AGI), it's all worth it; if not, it’s all worthless." Investors are betting not only on the model's computational power but also on whether Sam Altman can replicate human intelligence. Boom or Bubble? AI may indeed open up a trillion-dollar market, but the current capital frenzy carries familiar overtones—valuations are grossly detached from profitability, and narratives precede facts. Is this the prologue to an “AI boom,” or a re-enactment of another “bubble myth”? When everyone believes the future belongs solely to a few “AI black hole companies,” bubbles are often just around the corner from bursting.