{"id":370797,"date":"2025-12-25T11:03:09","date_gmt":"2025-12-25T11:03:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/370797\/"},"modified":"2025-12-25T11:03:09","modified_gmt":"2025-12-25T11:03:09","slug":"ceo-of-a-134-billion-software-giant-blasts-companies-with-billions-in-funding-but-zero-revenue-thats-clearly-a-bubble-right-its-like-insane","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/370797\/","title":{"rendered":"CEO of a $134 billion software giant blasts companies with billions in funding but zero revenue: ‘That’s clearly a bubble, right\u2026 it’s, like, insane’"},"content":{"rendered":"

In a typically candid assessment of the current artificial intelligence landscape, the outspoken CEO of $134 billion software analytics firm Databricks<\/a>, Ali Ghodsi, issued a stark warning regarding the ballooning valuations of AI startups that lack fundamental business metrics. Speaking at Fortune Brainstorm AI in San Francisco, Ghodsi blasted the trend of investors pouring capital into unproven companies, stating, \u201cCompanies that are worth, you know, billions of dollars with zero revenue, that\u2019s clearly a bubble, right, and it\u2019s, like, insane.\u201d Ghodsi clarified that he sees a \u201chuge bubble in many, many portions of the market.\u201d<\/p>\n

The vibes in the Valley are bad, in the opinion of Ghodsi, who holds a PhD in computer science. He said that even the investors fueling this frenzy are aware of the unsustainable nature of the market. In private conversations, he claimed, venture capitalists express exhaustion with the hype cycle, telling him, \u201cMaybe I should just go on a break for, like, six months and come back and it\u2019ll be, like, really financially good for me.\u201d<\/p>\n

Ghodsi said he agreed with the critique of circular financing among many players in the AI space, artificially inflating the market. Rather than viewing the bubble as near its popping point, Ghodsi predicts the \u201ccircular aspect\u201d of the situation will deteriorate before it corrects. \u201cI think like 12 months from now, it\u2019ll be much, much, much worse.\u201d Current market wobbles are actually a healthy signal for CEOs to \u201ctake a step back,\u201d he added.<\/p>\n

The IPO question and strategic patience<\/p>\n

This skeptical view of the current market hype explains Databricks\u2019 reluctance to rush toward an initial public offering (IPO), despite Ghodsi admitting to \u201cflirting\u201d with the idea. He highlighted that staying private at this point offers a strategic buffer against market volatility. He drew a sharp contrast between Databricks and competitors who rushed to go public during the 2021 boom, only to face severe corrections.<\/p>\n

\u201cIn 2021, most of my peers, CEOs, they were like we got to IPO,\u201d but by 2022, Ghodsi added, they were suddenly in cost-cutting mode, whereas Databricks was able to hired thousands of people. He emphasized that if a bubble does burst, remaining private would allow the company to continue investing in long-term AI utility rather than reacting to short-term stock fluctuations.<\/p>\n

Real hurdles vs. market hype<\/p>\n

While the venture market overheats, Ghodsi argued that the reality of enterprise AI adoption is being throttled by corporate inertia, rather than a lack of technology. He identified security concerns and data governance as the primary bottlenecks for large organizations.<\/p>\n

Databricks, which per its name has many clients that hire it to sort through their data, has many customers 10 years old and older, and they\u2019re all really held back on cyber concerns. <\/p>\n

\u201cThe big thing holding you back\u201d in that scenario, Ghodsi said, \u201cis that you can\u2019t actually do anything because you\u2019re so worried about getting hacked.\u201d <\/p>\n

He said \u201cAI lawyers,\u201d or lawyers specializing in the emerging field of AI law, are now slowing down operations by scrutinizing regulations and model policies. Furthermore, he described the data architecture within most legacy organizations as \u201can absolute mess\u201d resulting from 40 years of piling on software from different vendors, leaving data siloed and difficult to access\u2014and a lot of work for Databricks to do.<\/p>\n

Where the real value lies<\/p>\n

Despite his warnings about the bubble, Ghodsi remained bullish on specific, high-utility AI applications, particularly \u201cAI agents\u201d and \u201cvibe coding.\u201d He revealed a surprising statistic: \u201cFor the first time we\u2019re seeing over 80% of the databases that are being launched on Databricks are not being launched by humans but by AI agents.\u201d<\/p>\n

He argued that the foundation model layer\u2014the technology provided by companies like OpenAI and Google\u2014is becoming a commodity with low margins due to hyper-competitiveness. Instead, the real revenue potential lies in the application layer where agents perform specific work, such as drug discovery in healthcare or automated research in finance.<\/p>\n

Ghodsi advised corporate leaders to cut through the internal politics stalling these advancements. Noting the \u201ctussle\u201d between executives fighting to be the \u201cAI person,\u201d he offered blunt advice: \u201cPick one person for your company\u201d to lead the strategy, rather than creating a \u201cthree-headed monkey\u201d of conflicting leadership.<\/p>\n","protected":false},"excerpt":{"rendered":"In a typically candid assessment of the current artificial intelligence landscape, the outspoken CEO of $134 billion software…\n","protected":false},"author":2,"featured_media":370798,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105,1485],"class_list":{"0":"post-370797","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology","14":"tag-venture-capital"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/370797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=370797"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/370797\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/370798"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=370797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=370797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=370797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}