The Valuation Puzzle of Post-Training AI Startups

We’re starting to see more generative artificial intelligence-related startups announce they’ve crossed $100 million in annualized revenue. According to our Generative AI Database, at least 15 such startups have reached that threshold.

The latest is Mercor, which helps OpenAI and other AI developers find contractors to help train new models. They are often experts in subjects like software engineering, law and medicine and help improve AI answers about those fields by rating the AI’s answers or teaching the model a better approach.

Mercor CEO Brendan Foody said on X last month that the company was generating $100 million in annualized revenue—typically meaning the past month's revenue multiplied by 12—up from $1 million in ARR 11 months earlier. That kind of growth likely helped the company raise financing at a $2 billion valuation last fall.

On the surface, that sounds impressive—and it is! But if there’s one thing we’ve learned in the AI boom, it’s that you shouldn’t treat the revenue of AI startups today the same way you would have treated enterprise tech revenue in the past.