The AI boom won't last, a top VC warns, as he urges startups to cash out

• Elad Gil is urging AI startups to consider selling soon due to the potential for changing market dynamics.
• Gil is Silicon Valley's top solo VC, with billions at his disposal.
• He sees parallels between the AI boom and the 1995-2001 internet boom.

Elad Gil, Silicon Valley's top solo venture capitalist, has a stark message for AI founders: sell your company soon, while conditions are still favorable.

"Founders running successful AI companies should all take a cold, hard look at exiting in the next 12-18 months, which may be a value-maximizing moment for outcomes," Gil wrote in a blog post this week.

Gil's perspective carries weight. He's raised more than $2 billion for a personal war chest to invest in AI startups. Gil, a serial founder who sold a startup to Twitter (now X), has backed several notable players in the space, such as Harvey, Mistral, Pika, and Perplexity. He was also an early investor in Anduril, Airbnb, and Stripe.

Investors have raised the alarm of an AI bubble since last year. But Gil's warning reflects both optimism about AI's growth and caution about how quickly the tech landscape can change.

Gil's reasoning draws on history. During the internet boom of 1995 to 2001, roughly 2,000 companies went public, but only a dozen or two dozen survived long-term. He thinks a similar pattern could emerge with today's AI boom.

Right now, demand for AI is surging. Many startups are seeing rising revenue and appear durable. But Gil warned this momentum may not last. As competition intensifies and the market matures, weaker or less differentiated companies could struggle to maintain their position.

"In the AI era, most companies, including those that are ramping revenue today, will see the market, competition, and adoption, turn on them," Gil wrote.

For founders, that creates a narrow window. Selling or merging while valuations remain high could maximize returns before conditions shift.

"While the tide is rising, many companies will seem to be unstoppable and durable — whether they are or not in the long run remains to be seen," he warned.

That said, he does not believe all AI startups face the same fate. A small group, such as major model developers like OpenAI and Anthropic, are likely to become foundational players.

"A handful of companies should absolutely not exit (eg. OpenAI, Anthropic) but many should if they can while everything is on the upswing," Gil wrote.

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