This report shares VC perspectives on AI startups in 2025, highlighting both excitement and caution. Investors see AI as an innovation rail with transformative potential but warn of hype and high churn. Metrics like ARR remain key, while ERR reflects experimental spending. Pricing is shifting to usage-based models due to AI’s compute costs. Successful startups blend AI with strong workflows, clear customer value, and data gravity advantages. Founders impress VCs by demonstrating passion, market insight, and thoughtful execution. Despite bubbles, investors believe AI will become embedded in business, driving lasting change.

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