AI startups use uneven pricing in funding rounds to inflate valuations before generating revenue
By
Rashi Shrivastava
Summary
This article examines how AI startups are using a controversial fundraising tactic called "priced rounds" — where different investors pay wildly different prices for shares in the same funding round — to inflate their valuations to billions of dollars before generating any revenue or even having a product. It focuses on David Silver's startup Ineffable Intelligence and other AI companies leveraging this strategy, exploring the mechanics of how these deals work, the risks for later-stage investors, and the broader implications for the AI investment bubble.
Source
Twitter / XAI startups use uneven pricing in funding rounds to inflate valuations before generating revenueforbes.comKey quotes
· 3 pulledWe can put AI in our toasters, a
Earlier this year, David Silver, the renowned former scientist at Google DeepMind, dialed into a Zoom meeting with a venture capital firm to pitch his new startup Ineffable Intelligence.
Silver, who spent over a decade at Google, believed the current approach to training AI models wouldn't work long term.
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