AI is thought to be one of the most transformative technologies in the history of tech, and companies building in the space are racking up some serious valuations.
There are now as many as 498 AI unicorns, a CB Insights report says. These 498 companies are each valued at $1 billion or more, and have a combined value of $2.7 trillion. Incredibly, 100 of these 498 companies were founded since 2023, which means that they’ve touched the $1 billion valuation within two and a half years of being founded.
Given how CB Insights says there are 1,276 unicorn companies in all, AI companies now represent nearly 40 percent of all startup unicorns. And there’s depth in the space as well — while there are 498 companies valued at $1 billion or more, there are 1,300 AI startups that are valued at more than $100 million.
These are astonishing numbers. Rarely has a new technology spawned this much value in such a short period of time — investors clearly see that AI could not only change multiple industries, but also how the world works, and seem to be betting large sums of money on companies that look to capitalize on the new technology.
But all this value creation this quickly will bring back some uncomfortable memories for those who’ve been around for a while — before the dot-com crash in 2000, the valuations of internet companies had similarly exploded, with all manner of companies, including some infamous names like Webvan and Pets.com earning stratospheric valuations. Some could argue that there are parallels between the dot com boom and AI — both were transformative technologies, and while the internet ended up being enormously consequential and created massive amounts of value, it did have to go through the dot-com crash in 2000. If one were to follow the parallel, it’s not inconceivable that AI could go through a similar crash of its own.
But then AI is also different in many ways. While some firms in the dot-com era were barely making any revenues, many AI startups seem to have genuine interest from paying consumers. The internet enabled many functions that existed offline to be brought online, such as Pets.com, and this led to some frothiness in the space, but AI has created an entirely digital intelligence which didn’t exist in any form prior — AI is enabling people to do things that simply couldn’t be done before, and AI company valuations might accurately reflect this ability. It remains to be seen how the valuations of these AI startups shape up in the coming years, but as of now, AI startups are being valued at some unprecedented numbers as they bring the wonders of this new technology to billions of consumers.