"Despite the slowdown, I recently led Gradient Labs through a one-week €11.1mn Series A. What did I learn? Rather than worrying about missing out on the gold rush, investors are now focused on whether companies can actually deliver. They don't want promises, but proof: demos that work, products that sell, and customers who back up lofty claims."
"As the CEO of Gradient Labs - an AI customer service platform for highly-regulated industries - I've seen investors grow wary of AI-washing: the practice of exaggerating a company's AI use or capabilities. And understandably so. Because for all its promise, AI comes with plenty of risk. Gartner predicts of agentic AI projects will be cancelled by 2027, while MIT research shows of pilot projects fail. Even Sam Altman, arguably the sector's biggest beneficiary, has we're in the middle of an AI bubble."
Venture capital investment surged to a 10-quarter high in Q1 2025, with artificial intelligence accounting for over €44.6bn. Investors initially backed many startups that mentioned AI, often rewarding the illusion of innovation. AI-washing describes exaggerating a company's AI use or capabilities, and investors have grown wary of it. Analysts warn of high cancellation and failure rates for AI projects, and leading industry figures have cautioned about an AI bubble. Overall VC investment fell 21% between Q1 and Q2, and investors now demand working demos, paying customers, and verifiable traction rather than marketing language.
Read at TNW | Deep-Tech
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