Google DeepMind CEO Demis Hassabis warned that parts of the AI startup market are wildly overpriced and heading toward a valuation correction, as early-stage companies raise huge funding rounds without proven products.
Speaking on the Google DeepMind Podcast, Hassabis said some startups are securing tens of billions of dollars in valuation before they have even properly launched, questioning whether such pricing is sustainable. “My guess is probably not,” he said.
He drew a clear line between early AI startups and Big Tech, arguing that companies like Google are investing heavily in AI infrastructure backed by real revenue and business fundamentals.
Hassabis described AI as overhyped in the short term but underappreciated in the long term, adding that major technological shifts often swing from skepticism to obsession, creating bubbles along the way. He said an “over-correction” is likely, calling it a natural response after years of underestimating AI’s potential.
His comments come as scrutiny grows around sky-high AI startup valuations, with young founders raising hundreds of millions of dollars despite limited track records. Veteran investors have echoed similar concerns, warning that many investors are chasing moonshot ideas with no revenues or profits.
Despite the hype, Hassabis said his focus remains on building frontier AI models at DeepMind, rather than worrying about whether the sector is in a bubble.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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