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    [OC] AI deal activity in the US already far outstrips the dotcom era
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    [OC] AI deal activity in the US already far outstrips the dotcom era


    Hi, this chart if from a story that reports on how lossmaking startups have still managed to gain close to $1tn in valuation, adding to fears about an inflating bubble in private markets that could spill over into the wider economy.

    Tech has endured boom and bust cycles. But the current scale of investment is on a different magnitude. VCs invested $10.5bn into internet companies in 2000, roughly $20bn adjusted for inflation. In all of 2021, they put $135bn into software-as-service start-ups.

    VCs are on course to spend well over $200bn on AI companies this year.

    Source: PitchBook; FT calculations

    You can read the full story for free with your email here: http://ft.com/content/59baba74-c039-4fa7-9d63-b14f8b2bb9e2?segmentid=c50c86e4-586b-23ea-1ac1-7601c9c2476f

    Victoria – FT social team

    Posted by financialtimes

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    7 Comments

    1. wishIwere on

      I think normalizing for tech market cap would give a vastly different picture. Dot com was a fundamentally different era where tech “giants” where much smaller, social media companies weren’t a thing, the only at home device connecting to the internet was a pc or laptop, etc. We are definitely headed for a burst bubble though either way imo.

    2. Apprehensive_Mode686 on

      Bound to bust before too long. Where is the revenue going to come from to make all these funded companies profitable?

    4. AerysSk on

      I believe this chart doesn’t tell the story. Money in the world increases day by day because people work. Comparing 2025 to 2020 would be like comparing cooked beef vs raw beef – you are ignoring who is the cook.

    5. AssimilateThis_ on

      Not beautiful, need to look at deal value relative to the underlying sector market cap with the same inflation adjustment.

    6. phd_reg on

      A lot of (most of?) the investment is in physical capital… GPUs, datacenters, etc. So without including the fiber build-out during the dotcom boom, this is an apples-to-oranges comparison. 

      Even more to the point, the “bubble” wasn’t the investment by private capital but the subsequent new listings and THEIR skyrocketing valuations. People keep using that word, but I don’t think it means what they think it means.