Money was no object for the AI industry in early 2025. A vibe check crept in the second half of the year. OpenAI raised $40 billion at a $300 billion valuation. Safe Superintelligence and Thinking Machine Labs raised individual $2 billion seed rounds before shipping a single product. Even first-time founders were raising at a scale that once belonged only to Big Tech. Such astronomical investments were followed by equally incredible spends. Meta shelled out nearly <head>5 billion to lock up Scale AI CEO Alexandr Wang and spent countless more millions to poach talent from other AI labs. Meanwhile, AI’s biggest players promised close to <head>.3 trillion in future infrastructure spending. The first half of 2025 matched the fervor, and investor interest, of the prior year. That mood has shifted in recent months to deliver a vibe check of sorts. Extreme optimism for AI, and the accompanying wild valuations, is still intact. But that rosy view is now being tempered with concerns over an AI bubble bursting, user safety, and the sustainability of technological progress at its current pace. The era of unabashed acceptance and celebration of AI is fading just a skosh at the edges. And with it, more scrutiny and questions. Can AI companies sustain their own velocity? Does scaling in the post-DeepSeek era require billions? Is there a business model that returns a sliver of the multi-billions of investment? We’ve been there for every step. And our most popular stories of 2025 tell the real story: an industry hitting a reality check even as it promises to reshape reality itself. How the year started WASHINGTON, DC – JANUARY 21: OpenAI CEO Sam Altman appears during a news conference with U.S. President Donald Trump.Image Credits:Getty Images The biggest AI labs got bigger this year. Techcrunch event San Francisco | October 13-15, 2026 In 2025 alone, OpenAI raised a Softbank-led $40 billion round at a $300 billion post-money valuation. The company also reportedly has investors like Amazon orbiting with compute-tied circular deals, and is in talks to raise <head>00 billion at an $830 billion valuation. That would bring OpenAI close to the <head> trillion valuation it is reportedly seeking in an IPO next year. OpenAI rival Anthropic also closed <head>6.5 billion this year across two rounds, its most recent raise pushed its valuation to <head>83 billion with heavy hitters like Iconiq Capital, Fidelity, and the Qatar Investment Authority participating. (CEO Dario Amodei confessed to staff in a leaked memo that he was “not thrilled” about taking money from dictatorial Gulf states). Then there’s Elon Musk’s xAI, which raised at least <head>0 billion this year after acquiring X, the social media platform formerly known as Twitter that Musk also owns. We’ve also seen smaller, new startups get a hypey boost from froth-mouthed investors. Former OpenAI chief technologist Mira Murati’s startup Thinking Machine Labs secured a $2 billion seed round at a <head>2 billion valuation despite sharing almost no information about its product offering. Vibe-coding startup Lovable’s $200 million Series A earned it a unicorn horn just eight months after launching; this month, Lovable raised another $330 million at a nearly $7 billion post-money valuation. And we can’t leave out AI recruiting startup Mercor, which raised $450 million this year across two rounds, the latest bringing its valuation up to <head>0 billion. These absurdly large valuations are still happening even against the backdrop of still-modest enterprise adoption figures and serious infrastructure constraints, heightening fears of an AI bubble. Build, baby, build Dominion Energy’s Mount Storm coal-fired power station is planned to power a vast data center complex in West Virginia. (Photo by Ulysse BELLIER / AFP)Image Credits:Getty Images For the larger firms, those numbers aren’t coming from nowhere. Justifying those valuations requires building vast amounts of infrastructure. The result has created a vicious cycle. Capital raised to fund compute is increasingly tied to deals where the same money flows back into chips, cloud contracts, and energy, as seen in OpenAI’s infrastructure-linked funding with Nvidia. In practice, it’s blurring the line between investment and customer demand, stoking fears that the AI boom is being propped up by circular economics rather than sustainable usage. Some of the biggest deals this year powering the infrastructure boom were: Stargate, a joint venture between Softbank, OpenAI, and Oracle, which includes up to $500 billion to build AI infrastructure in the U.S. Alphabet’s acquisition of energy and data center infrastructure provider Intersect for $4.75 billion, which comes as the company said in October it plans to lift its compute spend in 2026 up to $93 billion. Meta’s accelerated data center exp