Don’t be afraid of an AI bubble – investor optimism is roaring back, says Hoberman

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solo2 June 2023Last Update : 4 months ago
Don’t be afraid of an AI bubble – investor optimism is roaring back, says Hoberman

A ballooning artificial intelligence (AI) bubble could be a “healthy” sign for the market and reflects investor optimism, according to one of Britain’s most prolific entrepreneurs.

in an interview with city ​​amBrent Hoberman, founder of and FirstMinute Capital, said the sharp jump in AI valuations suggests investors are once again ready to take the plunge in the market in hopes of landing “one of those capable 100x investments.”

“I think often you get these bubbles and you can really say that the bubbles are healthy,” Hoberman said. city ​​am

“I would say that bubbles indicate an era of optimism from investors, when people are willing to take a really long look into the future.”

Hoberman said the generative AI funding round was one of the few “hot deals” at the moment, as VC investing remains after a tumultuous 12 months.

Investors have made great bets in the last one year after rising inflation and rising interest rates saw the markets crash and cheap cash taps shut.

The slump in the first quarter of this year continued, with UK firms investing a total of £2.9bn in the first three months of the year, the lowest amount of cash raised in the opening quarter of a year since 2020, according to data From Big Four firm KPMG.

FirstMinute Capital was “certainly slow in terms of capital allocation” but was “still doing deals,” Hoberman said.

The boom in private market AI deals follows investors’ scramble to back AI-related stocks on public markets, which has pushed valuations to record highs over the past few weeks.

Nvidia, one of the world’s top producers of AI hardware and software, soared in value last week and briefly became the fifth firm to cross the $1 trillion valuation landmark.

However, the spree of investors in both the public and private markets has drawn caution from some analysts.

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