Tech investor Orlando Bravo says ‘valuations in AI are at a bubble’
Thoma Bravo co -founder Orlando Bravo said that valuations for artificial intelligence companies were “in a bubble” and compared him to the Dotcom period.
However, one of the main differences in the market at the moment said that large companies with “healthy balance sheets” have financed AI businesses.
As of June, Bravo’s private capital firm boasts more than $ 181 billion in management assets, and a significant portion of its portfolio focuses on receiving and selling corporate technology companies by investing in cyber security.
Bravo said CNBC investors in Squawk on the street on Tuesday could not value $ 10 billion for $ 10 billion.
“This company will have to produce one billion dollars of free cash flow to double an investor’s money.” He said. “Even if the product is right, even if the market is right, this is a long order.”
Openai recently completed the sale of a secondary share that will value $ 500 billion. The company is expected to generate $ 13 billion for 2025.
NVIDIA recently said that the ChatGPT manufacturer will invest up to $ 100 billion in part to help the Chatgpt manufacturer to rent receipts and create super computer facilities in the coming years.
Other public companies rose to the AI promises with Palantir’s market value climbed to $ 437 billion, and was among the 20 most valuable public trade companies in the United States, and Applovin is now worth $ 213 billion.
Even early stage values in AI are great, Thinking Machines Lab has recorded a $ 12 billion valuation in a 2 billion dollars of seed round.
Despite inflated numbers, Bravo stressed that there is a “big difference” between Dotcom collapse and AI’s current view.
“Now, you have really big companies and some big balance sheets and healthy balance sheets that finance this activity, which was different from what happened about 25 years ago.” He said.
