TechCrunch reported that inflated ARR is a common practice among AI startups, with Spellbook's co-founder calling it a "huge scam," and Fortune noted contracts with kill provisions that let customers exit while the company books the revenue.
Our position: any ARR figure should come with a definition. Is it annualized usage, signed contracts, or committed subscriptions? Press, investors and buyers should ask. On this site we label company-reported figures as such, and we will keep doing so.
This editorial reflects the view of AI Business Watch.
Source: TechCrunch