The $73 Billion Illusion: When Hype Replaces Math

AI startups are booming. But behind the buzzwords, many are guessing, not growing.

Author

Glenda Carnate
October 27, 2025

Read time: 2.5 minutes

You’re dancing to a tune you can’t hear. The rhythm feels good, the crowd is cheering—but the beat? It’s off.

I’ve lived this. As a CEO who’s raised funds and built models, I’ve seen the “magic bean” moment… when everyone smells a 100× return but nobody understands the math.

Recently, I asked a founder how their AI model worked. The answer? “It just knows.” The same answer my son gives when I ask how AI “thinks.” Translation: confident, but clueless.

In Q1 2025, AI startups raised $73.1 billion globally, making up 57.9% of all venture capital funding. (PitchBook, 2025)
That’s more than half of all global VC money but how many of those founders can clearly explain their unit economics?

The Hard Truths Founders Must Face:

  1. Hype:
    Buzzwords attract funding, but they don’t build businesses. If you can’t explain your growth engine in one clear sentence, you’re selling fantasy, not value.

  2. Risk:
    AI hype hides burn rates. I’ve seen “gen-AI for everything” startups raise millions, only to collapse when churn and metrics hit reality.

  3. Governance:
    Even the most advanced tech fails without systems. No model = no repeat business = no sustainable exit.

  4. Clarity:
    If your pitch sounds like fireworks but lacks data, investors will see it. They look for signals of discipline, not noise.

  5. Reality:
    Vibes don’t scale. Numbers do. I built one company on enthusiasm and another on execution. Only one lasted.

💡Key Takeaway: 

Investing without understanding the math is like hitting a high note without hearing the baseline. The spotlight flashes—and then it fades.
Get comfortable with the real drivers: numbers, governance, and risk.
Everything else? Just “6–7.”

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