{"id":7453,"date":"2025-09-25T15:11:07","date_gmt":"2025-09-25T15:11:07","guid":{"rendered":"https:\/\/aomtodayprod.wpenginepowered.com\/?p=7453"},"modified":"2025-09-25T19:11:28","modified_gmt":"2025-09-25T19:11:28","slug":"ai-startups-are-booming-but-a-bust-may-be-looming","status":"publish","type":"post","link":"https:\/\/www.aom.org\/today\/ai-startups-are-booming-but-a-bust-may-be-looming\/","title":{"rendered":"AI Startups Are Booming, but a Bust May Be Looming"},"content":{"rendered":"

By Nick Keppler<\/a><\/p>\n

In 2024, venture-capital funds invested $100 billion in AI startups, an 80% increase from 2023, according to Crunchbase<\/a>, a provider of information about private companies.<\/p>\n

This is an early part of a familiar cycle, said Academy of Management Scholar Marc Gruber<\/a> of the \u00c9cole Polytechnique F\u00e9d\u00e9rale de Lausanne.<\/p>\n

\u201cI\u2019ve been in academia long enough to see the internet bubble of the 1990s burst,\u201d Gruber said. \u201cWe see this in in all the different eras.<\/p>\n

\u201cThere was a period when there were a lot of blockchain-based startups,\u201d he said. \u201cThat was a trend a few years ago.\u201d<\/p>\n

For a few years, a concept\u2014such as ecommerce or social media\u2014will become trendy among startups. Founders will incorporate it into their business model (or at least their marketing communications). Eventually, most of these businesses will fail, and it will seem obvious in retrospect that the buzzword was shoehorned in to try to benefit from the fad.<\/p>\n

\u201cWe have this AI funding boom,\u201d said Gruber. \u201cPeople will eventually realize if you have AI on your company website and logo or whatever, you need to ultimately deliver value.\u201d<\/p>\n

Although there are always investors itching to get in on (or near) the ground floor of the next big thing, over the last 30 years, the boom-bust cycle has soured some people\u2019s perception of startups, once seen as an edgy vehicle for innovation and business genius that a stodgy established company would not understand or could not replicate.<\/p>\n

\u201cMany startups fail,\u201d said Gruber. \u201cThey just don\u2019t find something that customers want or want long enough to warrant that there\u2019s a long-term business.<\/p>\n

\u201cThat\u2019s where I think the negative perception comes in,\u201d he said. \u201cThese startups have clients, suppliers, and employees, and if they fail, none of them are extremely happy, and there are disappointed funders as well.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

By Nick Keppler In 2024, venture-capital funds invested $100 billion in AI startups, an 80% increase from 2023, according to Crunchbase, a provider of information about private companies. This is an early part of a familiar cycle, said Academy of Management Scholar Marc Gruber of the \u00c9cole Polytechnique F\u00e9d\u00e9rale de Lausanne. \u201cI\u2019ve been in academia […]<\/p>\n","protected":false},"author":12,"featured_media":7454,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[343,22,21,75],"tags":[],"sp_smart_badges":[],"ppma_author":[840],"class_list":["post-7453","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ai","category-entrepreneurship","category-innovation","category-investors"],"acf":[],"yoast_head":"\nAI Startups Are Booming, but a Bust May Be Looming - Academy of Management Today<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aom.org\/today\/ai-startups-are-booming-but-a-bust-may-be-looming\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Nick Keppler\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/ai-startups-are-booming-but-a-bust-may-be-looming\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/ai-startups-are-booming-but-a-bust-may-be-looming\\\/\"},\"author\":{\"name\":\"Nick Keppler\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/#\\\/schema\\\/person\\\/1b8aff6a6e3f22d0d813c97e6aab7149\"},\"headline\":\"AI Startups Are Booming, but a Bust May Be Looming\",\"datePublished\":\"2025-09-25T15:11:07+00:00\",\"dateModified\":\"2025-09-25T19:11:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/ai-startups-are-booming-but-a-bust-may-be-looming\\\/\"},\"wordCount\":316,\"image\":{\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/ai-startups-are-booming-but-a-bust-may-be-looming\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.aom.org\\\/today\\\/wp-content\\\/uploads\\\/2025\\\/08\\\/e3fc93d3-8fd8-4700-9c6b-2bf0a9c33b17.webp\",\"articleSection\":[\"AI\",\"ENTREPRENEURSHIP\",\"INNOVATION\",\"INVESTORS\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.aom.org\\\/today\\\/ai-startups-are-booming-but-a-bust-may-be-looming\\\/\",\"url\":\"https:\\\/\\\/www.aom.org\\\/today\\\/ai-startups-are-booming-but-a-bust-may-be-looming\\\/\",\"name\":\"AI Startups Are Booming, but a Bust May Be Looming - 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This is an early part of a familiar cycle, said Academy of Management Scholar Marc Gruber of the \u00c9cole Polytechnique F\u00e9d\u00e9rale de Lausanne. \u201cI\u2019ve been in academia…","_links":{"self":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/7453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/comments?post=7453"}],"version-history":[{"count":0,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/posts\/7453\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media\/7454"}],"wp:attachment":[{"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/media?parent=7453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/categories?post=7453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/tags?post=7453"},{"taxonomy":"sp_smart_badges","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/sp_smart_badges?post=7453"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.aom.org\/today\/wp-json\/wp\/v2\/ppma_author?post=7453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}