GIC warns of ‘hype bubble’ as AI dominates global venture capital investing in 2025

SINGAPORE: A hype bubble is forming in early-stage artificial intelligence (AI) venture investing, GIC’s group chief investment officer Bryan Yeo said, as AI takes up the largest share of venture capital funding this year.

Speaking at the Milken Institute Asia Summit in Singapore on Friday (Oct 3), Mr Yeo warned, “If the technology doesn’t catch up and doesn’t deliver as per the high expectations that the market’s pricing in, then we’re in for a bubble.”

This comes as the South China Morning Post (SCMP) reported, citing PitchBook data, that venture capitalists invested US$192.7 billion (S$249.11 billion) into AI start-ups so far this year, setting a global record and putting 2025 on track to be the first year where more than half of global venture capital money went into the industry.

Most of the funding went to established start-ups like Anthropic and xAI, while smaller companies outside of AI struggled to raise funds.

According to The Edge Singapore, Mr Yeo also warned of a possible fiscal risk in the global economy, pointing to the large amount of debt governments built up during the pandemic, questioning whether the world can grow out of it.

He added that it will be politically difficult for governments to cut spending and raise taxes, which could eventually force investors to raise yields that will unsettle global markets and weaken confidence in a country’s currency. /TISG

Read also: Southeast Asia’s venture capital funding falls back to 2016 levels

Featured image by Depositphotos (for illustration purposes only)