OpenAI to Anthropic — Do multiple funding rounds for top AI startups pose risks amid AI bubble concerns?

As top tech and artificial intelligence (AI) startups focus their attention on raising several rounds of funding, with each round the companies are doubling or even tripling their valuations amid industry-wide fears looming over an AI bubble, the news portal reported. Luck.

A lot of AI startup funding could quickly turn into a strategic advantage for companies or become a dangerous liability, according to the news portal’s report, citing Jennifer Li, general partner at Andreessen Horowitz.

Startups like OpenAI, Anthropic, Mercor, Cursor, Reflection AI, OpenEvidence, Lila Sciences, and Harmonic are a few others that have raised two or more funding rounds in 2025 as valuations rise in the market.

When does finance become a dangerous liability?

Back-to-back funding rounds for a startup can turn into a dangerous liability if the company’s focus shifts from building its foundation to raising funds from investors and venture capitalists.

According to the report, Jennifer Li said multiple rounds of financing could go wrong when “the focus shifts from construction to fundraising before the foundation is established.”

The US-based venture capital firm expert also told the news portal that several rounds of funding can be beneficial for a startup that directs the money towards placing its products in the right market and running its business properly.

“These (multiple funding rounds) go right when capital directly supports product market alignment and execution,” Jennifer Li said.

Startups founded without a strong operational foundation with high valuations often face the risk of decline in the industry.

Back-to-back funding for AI startups

Artificial intelligence (AI) startups such as OpenAI, Anthropic, Mercor, and Cursor have raised several rounds of funding from investors in 2025 amid looming concerns about a widespread AI bubble.

OpenAI, one of the largest startups in the artificial intelligence space, achieved a $500 billion valuation last month, above its $300 valuation level in March 2025. The company started this year with a $157 billion valuation, which it raised in an October 2024 financing round.

According to the news portal’s report, OpenAI’s valuation will increase by approximately $1 billion per day between October 2024 and October 2025, indicating an increase of $29 billion every month.

Artificial intelligence food chain and recruiting startup Mercor reportedly raised $100 million in a Series B round in February 2025 at a $2 billion valuation, and again raised $350 million in an October 2025 round, pushing the startup’s valuation to $10 billion.

According to the news portal’s report, companies such as Cursor, Reflection AI, OpenEvidence, Lila Sciences, Harmonic, Fal, Abridge and Doppel have completed two or more funding rounds in 2025, while other startups such as Harvey and Databricks are reportedly in talks for a third round.

This venture financing frenzy follows the 2021 boom, which sparked multiple rounds of zero interest rate policy. Tom Biegala, co-founder of Bison Ventures, told the news portal that he feels the current market conditions are not like 2021.

“Companies go around for a spin…not because they have made any real progress or achieved any technical or commercial milestones,” said Tom Biegala, citing high investor excitement resulting from the effortless flow of financing.

This comes at a time when market investors fear a potential AI bubble in the US; because more and more companies are turning their attention and money to investing in artificial intelligence.