Amid broad venture capital enthusiasm for AI, a minority of firms have taken the less common public position of explicitly avoiding AI-focused investments for the time being, citing specific concerns about valuation discipline and capital-intensity risk in the category rather than skepticism about AI's underlying importance.
What these firms' stated reasoning tends to be
Concerns commonly cited include valuations that have decoupled from disclosed revenue and unit economics across much of the category, capital intensity requirements that favor firms with deep enough pockets to fund multiple follow-on rounds rather than smaller funds, and a belief that the best returns will come from picking up strong companies at more reasonable valuations once broader enthusiasm cools rather than competing for deals at current prices.
Why this is a genuine strategic position, not simple risk aversion
Firms taking this position generally aren't arguing that AI lacks genuine long-term importance - they're making a specific bet about entry timing and pricing discipline, distinct from a bet about the technology's ultimate significance. This is a meaningfully different position than broad AI skepticism.
Why this position is uncommon
A firm publicly avoiding the sector generating the most attention and deal flow in venture capital risks appearing out of step to its own limited partners, who may expect exposure to the category regardless of a given fund's specific pricing discipline concerns. This creates real pressure to participate even for firms with genuine reservations.
Why this minority position is worth tracking
Firms explicitly sitting out the current AI funding environment, and their stated reasoning for doing so, offer a useful counterweight to the dominant narrative of unconditional enthusiasm, and their eventual re-entry point - if and when it comes - will be an informative signal about where they believe the market has found a more sustainable footing.