Some AI Firms a Little ‘Overvalued,’ Khosla’s Choi Says

Khosla Ventures partner Ethan Choi cautioned that some AI startups may be overvalued in a March 2026 interview, though he acknowledged their high costs and growth potential justify current valuations. Choi emphasized that AI’s full potential remains largely untapped, suggesting breakthroughs could redefine industries beyond current applications like generative models or automation. The cost of building advanced AI models—including compute, talent, and infrastructure—was cited as a key factor in inflated valuations, despite market skepticism. He defended high-risk investments in AI, arguing that the "possible upside" of transformative technologies outweighs short-term valuation concerns for venture capital firms. Choi’s remarks reflect broader industry tensions between AI hype and long-term viability, signaling cautious optimism amid rapid technological and financial shifts.