Not All AI Firms Will Pull Through, Says Bill Gates
He pointed out that the AI industry had become extremely competitive with several companies chasing similar concepts and fundings.
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The leading sector globally for startup funding from 2023 through 2025, artificial intelligence continued its winning streak, raising $202.3 billion this year. It is amid this high that comes Microsoft co-founder Bill Gates’ statement on what he feels about the momentum.
During the Abu Dhabi Finance Week, Gates commented that, despite the high valuations several AI startups are riding on, long-term sustainment may not be guaranteed.
He pointed out that the AI industry had become extremely competitive, with several companies chasing similar concepts and funding. “A reasonable percentage of these companies won’t be worth that much,” Gates said, adding that only a handful will emerge victorious in the long run while many will fail to justify their current valuations.
AI-linked companies trading at unusually high price-to-earnings ratios are a key concern as well, with companies such as Tesla and Palantir trading well above 200 while the S&P 500 averages around 20.
In recent weeks, global markets have seen volatility with analysts questioning whether AI company valuations are based on real long-term business potential or short-term hype.
2025 saw OpenAI, a Microsoft investee, become the most valuable private company of all time, valued at $500 billion, while rival Anthropic became the fourth-most valuable at $183 billion.
All’s not bleak in Gates’ eyes. Despite caution, he clarifies he’s not negative about AI as a technology and that it holds the potential to massively impact society. For him, “AI is the most important thing going on right now.”
The Microsoft chief feels AI can bring meaningful change to areas such as healthcare, education, and agriculture. Recently, the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) announced the Institute for Agriculture and Artificial Intelligence (IAAI), in collaboration with the UAE Presidential Court’s International Affairs Office and the Gates Foundation, to position AI as a core tool in global food security efforts and support over 43 million smallholder farmers worldwide.
“Is this technology profound and real? Absolutely,” Gates said.
Reiterating, he stressed that AI did not automatically guarantee business success and that companies need to work on strong execution, clear use cases, and sustainable business models for survival.
Lastly, he urged companies to focus on responsible development and not to use AI only as a tool to chase profits or inflate valuations, but to solve real-world problems and create long-term value.
