“Valuations Should Reflect What AI Firms Actually Build” — Warning Bells Over Soaring AI Valuations

Mohit Aron — the founder of Nutanix and Cohesity — cautions that the current surge in valuations of AI-driven companies may be dangerously detached from what these companies actually produce.

⚠️ What Aron Thinks Is Going Wrong

• Aron notes that “AI valuations today are unlike anything I’ve seen before.” He argues that money is being pumped into startups based more on hype and speculative expectations than on actual innovation or value delivered.
• Because such valuations have become a benchmark, venture-capital funding has become circular — inflated value of one company pushes up valuations for others, irrespective of their fundamentals, creating what Aron calls an “unsustainable zone.”
• His advice to investors: support firms solving real problems — and only give them valuations that align with the real revenue and tangible value they’re creating.

🌍 His Views on India’s AI Startup Scene

• Aron expresses concern that despite the AI hype, India hasn’t yet produced deep-tech companies doing cutting-edge, foundational AI innovation. Most Indian startup activity remains in consumer-tech, e-commerce or non-core-AI domains rather than core AI or deep infrastructure.
• He argues that the root cause isn’t lack of talent — but deficient infrastructure and systemic issues: academic institutions lack resources; research-industry linkages are weak. Without systemic upgrades, replicating Silicon-Valley style deep-tech success will remain difficult.

✅ What Should Investors/Founders Watch For

• Look beyond hype: Don’t get swayed simply because a company is “AI-labelled.” Check if they have real revenues, sustainable business model, and clear value — before believing lofty valuations.
• Demand realism and accountability: Valuations should be tied to what’s built — real products, solutions, customer traction — not just promises or expectations.
• For Indian ecosystem to thrive: Investing in infrastructure, research capacity, and deep-tech — rather than only consumer-tech — will be key to building globally competitive AI firms.