A recent survey by GeekWire among Seattle-area venture capitalists reveals that while there are signs of an overheated market in AI, particularly in early-stage private companies, it does not point to a catastrophic bubble. Many investors noted that current valuations often exceed the actual traction of these startups, especially in the seed and Series A stages.
Some venture capitalists expressed concern over significant investments in data center infrastructure, while others highlighted the trend of narrative-driven startups raising substantial amounts without proven customer bases. Despite these concerns, the technology itself is regarded as delivering tangible value.
Looking ahead to 2026, the investors advise startup founders to concentrate on solving genuine customer issues and establishing sustainable revenue models. They emphasize the importance of steering clear of hype and preparing for potential market cooling as the landscape evolves.
Among those quoted is Sabrina Albert (Wu), a partner at Madrona, who noted that the private market is experiencing notable exuberance, with capital flowing into startups that may struggle to justify inflated valuations for years to come.