TechCrunch Daily Crunch 2025 was the year AI got a vibe check
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Dec 30, 2025 In early 2025, the AI industry experienced a massive funding frenzy, highlighting monumental investments in companies like OpenAI and Anthropic. However, by mid-year, a 'vibe check' revealed cracks in infrastructure and concerns about sustainability. Incremental model releases, including GPT-5, lacked the earlier excitement, while emerging labs like DeepSeq challenged giants by delivering models faster and cheaper. As distribution battles intensified and legal scrutiny increased, predictions for 2026 raised questions about whether the hype would last.
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Money Fueled A Frantic AI Boom
- Early 2025 saw massive AI funding and valuations that outpaced real product and infrastructure readiness.
- That exuberance created fears of an AI bubble as investor optimism met practical constraints.
Big Raises, Uneasy Acceptances
- Anthropik raised $16.5 billion and its CEO admitted discomfort taking some investors' money.
- Startups like Thinking Machine Lab and Lovable raised huge rounds despite limited product details.
Infrastructure Spending Created Circular Economics
- Companies funneled capital into compute and data centers, creating circular economics tied to vendors and clouds.
- This blurred investment and customer demand and exposed fragility in financing large infrastructure deals.