Investor expectations for the artificial intelligence sector have become unrealistic, according to close observers of the market — a warning that lands as global venture funding for AI startups surged to $102 billion in the third quarter of 2026. The significance for readers lies in the contrast between the scale of capital flowing into the sector and the early signs that professional investors are growing cautious about what that capital will earn.

A recent Bank of America survey indicates that technology exposure among fund managers has reached its highest level since the post-Covid rebound, a reading that highlights potential overvaluation. Bank of America's monthly fund manager survey is widely tracked as a gauge of institutional positioning, lending the finding added weight. Because surveys of this kind measure how fully professional portfolios are already allocated to a single sector, elevated readings are often consulted when analysts assess how crowded a trade has become.

Signs of caution are emerging elsewhere as well. Reports of a selloff in Asian chip stocks point to growing skepticism about the returns that heavy AI investments are expected to produce. Semiconductor shares are frequently treated as a barometer of AI sentiment, since chip demand is tied to the data-center buildout that underpins the training and running of large AI models.

The backdrop to these developments is a series of unusually large private-market valuations for leading AI companies such as OpenAI and Anthropic, which are now being scrutinized more closely. OpenAI, the maker of ChatGPT, was valued at about $500 billion in a secondary share sale in late 2025, while Anthropic raised funding at a $183 billion valuation the same year — figures that rank both among the world's most valuable private companies. Unlike public share prices, private valuations are set in discrete funding rounds and secondary sales rather than through continuous trading, one reason headline figures of this size draw extra attention when confidence begins to waver.

Market pricing, however, suggests a potential decrease in confidence that Anthropic's valuation will reach $600 billion by year-end. A significant drop in the YES probability attached to Anthropic's $2 trillion valuation target may likewise indicate skepticism about achieving such lofty figures. Such pricing typically comes from prediction markets, where the value of a YES contract serves as a continuously updated estimate of how likely traders judge an outcome to be.

What to Watch

• Announcements from major AI firms such as Anthropic, particularly regarding funding rounds and strategic partnerships that could influence valuations.
• Any delay or reduction in investments by major stakeholders such as Amazon or Google, which would be consistent with scenarios in which valuations fall short of expectations.
• Further reports of stock selloffs or shifts in venture funding allocations, which could signal continued concern about the sustainability of current AI investment levels.

Source: CryptoBriefing