Considering all the funding that has gone almost blindly – and we’re being generous here – to startups where the product  and pitch deck are centered around AI, we’ve come to the conclusion that, at least in investors’ minds, AI is an acronym for ‘All In.’

AI Startups Are Failing at Alarming Rates: Why 90% of AI Ventures Die Within Their First Year, wrote VDWayne on Medium, and of course for the usual reason: no product/market fit, lack of market demand, and a new one, for those who still believe that AI is a do-all and end- all: overestimation of AI capabilities.

Another good read for founders and investors still chomping at the bit to cast their lot into the AI FOMO fever: I Analyzed 100 AI Startups That Failed in 2024 — Here’s What No One Tells You and noted Jeremy Merrell Williams in his piece, “2024 pulled the mask off the AI game. The hype was loud, the VC checks were fat, but the fall-off? Brutal. We’re talking 254 venture-backed startups filing for bankruptcy in just the first quarter. That’s a 60% jump from 2023 and over 7x the rate in 2019. And AI startups? They went down twice as fast as regular tech.

“Problem is that most AI startups were built like runway queens — they looked amazing on the catwalk, but had no shoes for the street. No clear revenue. No path to profit. They were raising money just to raise more money. Once the music stopped, they had no chair.”

According to the headlines from the tech media, the current cycle is ‘all AI funding, all the time,’ which may be true, but that doesn’t make it smart. According to an investor who spoke at one of our Investor Insights, it troubled him whenever one of his recently funded companies would be written up in Tech Crunch. Time after time, it wouldn’t be long before the company failed.

Gotta love the hype cycle.

Enter ROMO – Relief of Missing Out – or as MSN calls it, “the trend that turns FOMO on its head for better mental well-being. It’s not by any stretch of the imagination limited to investors. In fact, the term entered the zeitgeist as a result of an increasingly anxiety-provoking political, health and economic news. That’s when people started unplugging for their own mental well-being. ROMO.

Note to self: following closely on the heels of ROMO is JOMO – Joy of Missing Out.

We recently spoke with an investor friend of ours who applied the brakes early when it came to investing in AI. Having survived the Web 1.0 era overhype, she told us recently that she suspects that 99% of AI startups will go away very soon and she will not have lost a red dollar – much to her relief, speaking of ROMO. “Build scalable, real solutions,” is her message to the founders she’d met with and has turned down. “It’s simple.”

Old school, and it’s old school as it’s not only an approach that endures – it just doesn’t get old.

Speaking of old school, AI is not going away any time soon or ever, but just as in the days of Web 1.0 when too much money was being thrown at ideas and companies that didn’t have a market, a correction is coming and truth be told, it’s already underway. The times and seasons are a-changing, and welcome to the Fall and in case you need reminding, Google rose from the rubble of Web 1.0.

Many of those newcos are already under water and you investors – and founders – out there who didn’t succumb to FOMO are no doubt at this moment breathing a sigh of – speaking of under water – well, whatever floats your boat. Onward and forward.

Special note to self, speaking of AI:

Tech companies building massive AI data centers should pay to power them. It’s the local communities who are picking up the tab via rate increases and America’s Digital Demand Threatens Black Communities with More Pollution The collective costs of artificial intelligence and data centers are disproportionately harming Black households.