Unsolicited Term Sheets, Declining Dry Powder: Inside the AI Deal Rush

Last year, when money was surging into artificial intelligence startups, even some venture capitalists involved in those deals worried that the high costs of AI and unreliable demand from businesses were setting up many startups for disappointment.

Such skepticism, if not dead, is on its last legs. Monthly revenue that is doubling or quadrupling this year at startups such as OpenAI, Anthropic and Cursor-maker Anysphere have shown that businesses and consumers are consistently paying for AI apps, not just dabbling. That’s sent dealmaking, including into companies that are less proven, into overdrive.