Is this the first AI unicorn to fail? Insiders say yes, and name it

A live audience poll at the Cerebral Valley AI Conference unexpectedly spotlighted investor unease, reflecting growing doubts about surging AI valuations

What was meant to be another gathering celebrating artificial intelligence (AI) instead revealed a stark undercurrent running through Silicon Valley. At the Cerebral Valley AI Conference this week, a routine audience exercise unexpectedly turned into a referendum on the sector’s biggest names, exposing how jittery insiders have become about the breakneck pace and lofty valuations of leading AI firms.

 

When organisers asked more than 300 founders and investors which high-profile AI startup they viewed as the weakest bet, the answers pointed to a shifting mood in the Valley rather than standard conference chatter.

 

The survey, conducted by conference organiser and independent journalist Eric Newcomer, delivered an unexpected ranking: AI search company Perplexity was voted most likely to flop, with ChatGPT maker OpenAI landing in second place, reported Business Insider.

 

The poll was unscientific and anonymous, but it laid bare a tension many in the sector acknowledge privately: even as money pours into artificial intelligence, confidence in some of its highest-valued companies is wavering.

 

Why Perplexity topped the list

 

For close followers of the sector, Perplexity’s ranking was not surprising. The company, which pitches itself as an AI-powered challenger to Google Search, has become a symbol of frothy valuations.

 

Business Insider recently reported that Perplexity has raised repeated funding rounds in rapid succession, attracting investor demand at valuations ranging from $14 billion to as high as $50 billion.

 

Company spokesperson Jesse Dwyer replied to an email by Business Insider, saying, "Geeze, it (Cerebral Valley result) sounds more like the judgmental valley conference."

 

OpenAI’s surprising second place

 

OpenAI finishing just behind Perplexity caught more attention. The company is widely regarded as the consumer face of the AI revolution, with runaway adoption of ChatGPT and major enterprise deals.

 

Yet its soaring valuation and massive infrastructure commitments have fuelled quiet unease among some investors.

 

In a recent interview with investor Brad Gerstner, OpenAI CEO Sam Altman pushed back strongly against the idea that the company is overpriced.

 

Gerster asked: "How can a company with $13 billion in revenues make $1.4 trillion of spend commitments?"

 

Altman replied: "If you want to sell your shares, I'll find you a buyer. Enough."

 

Despite their place on the “most likely to fall” list, both OpenAI and Perplexity also appeared on the opposite end of the same survey as the companies attendees would bet on.

 

What industry leaders say about AI bubble

 

Across panels, speakers agreed that the AI sector is deep inside a bubble, but that bubbles are not inherently bad.

 

"I think every technology cycle, by definition, is a bubble. And the real question is, what are the enduring companies and how big will they be?" Kleiner Perkins partner Ilya Fushman told the audience, as reported by Business Insider.

 

Solo VC Elad Gil likened the moment to the late-1990s dotcom years. "There's going to be a few dozen things that become massive, a handful that will be truly outsize generational things, and then everything else is going to go away in one form or another," he said.