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Investors Are Falling for “Has AI”—Here’s Why It’s Dangerous 👇

A startup can claim AI, but that doesn’t mean it’s a real business.

Author

Glenda Carnate
November 21, 2025

Read time: 2.5 minutes

A startup can say it has AI… but that’s not a business model.

A few weeks ago, an investor proudly told their team: "This startup has AI. That’s enough for due diligence."

Cue the collective groan. Having AI isn’t a plan, it’s not a strategy, and it certainly doesn’t guarantee product-market fit. Investors, founders, and executives have seen it before: buzzwords impress, but revenue, scalability, and execution matter far more. AI alone can’t replace clarity, validation, or a real business model.

How Investors Can Spot Real AI Value?

1️⃣ Look for Revenue – AI is only as valuable as the product it powers.
2️⃣ Check Market Validation – Are customers paying or just curious?
3️⃣ Assess the Team – Execution beats technology hype every time.
4️⃣ Understand the Problem – AI should solve a real problem, not just exist.

💡Key Takeaway: 

“Has AI” is not a business model. Execution, revenue, and real-world impact are what make startups succeed—and that’s where investors should focus.

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