Orlando Bravo, founder of private equity firm The Riverside Company, has cautioned that unchecked enthusiasm for artificial intelligence in private markets could lead to costly missteps. He warns that inflated valuations and speculative investments may undermine long-term returns.
- AI-related private equity deals accounted for 40% of all new investments in Q3 2025.
- Total AI-focused venture funding reached $25 billion in the first half of 2025.
- Bravo highlighted that more than half of AI startups in private markets have no revenue.
- Valuations for early-stage AI firms have increased by an average of 78% year-over-year.
- Bravo warned that emotional FOMO-driven investing may lead to capital misallocation.
- History shows that 63% of high-valuation tech startups during the dot-com era failed to achieve sustainable returns.
Orlando Bravo has issued a stark warning about the growing trend of AI-driven investments in private markets, cautioning that emotional momentum could override disciplined analysis. Speaking at a recent industry forum, Bravo emphasized that the surge in venture funding targeting AI startups—now exceeding $25 billion in the first half of 2025—rivals the dot-com bubble’s peak in terms of speculative intensity. He noted that over 40% of new private equity deals in Q3 2025 were AI-related, despite limited revenue or proven scalability in many cases.