The boom of AI investments
Perplexity AI, the startup positioning itself as a competitor to Google Search (NASDAQ: GOOGL), recently raised $500 million in funding, bringing its valuation to $9 billion. This highlights a broader trend in the artificial intelligence (AI) industry: the overwhelming appetite for AI investments, even as many of these companies remain unprofitable.
Despite their operational costs—which include training AI models, running resource-intensive systems, and competing in a talent war—startups like Perplexity AI continue to attract investor dollars. In North America, AI funding has steadily increased quarter over quarter while overall venture capital investment has declined, which means AI companies are receiving a larger percentage of the investment dollars that are up for grabs.
In my opinion, the question for this industry is beginning to become: how much longer will this phenomenon last? At the moment, the future of this trend looks uncertain due to these businesses having net negative business models. …