The AI Economy: Picking Winners in the $400B Spending Boom
While the broader economy remains turbulent, big tech companies are pouring an estimated $400 billion into artificial intelligence (AI) infrastructure in the coming year, fundamentally reshaping how business gets done, according to market analysts. While some are quick to call it a developing bubble, the consensus is that generative AI (GenAI) is creating value at a pace we’ve never seen before, with McKinsey estimating the technology could generate between $2.6 trillion to $4.4 trillion in economic value across industries.
For dealmakers, this presents a massive opportunity. The challenge isn’t whether to get involved in AI deals but how to separate the genuinely transformative companies from the well-funded pretenders. Traditional company evaluation methods fall short when assessing AI businesses, where algorithms matter more than assets and data trumps distribution.
Smart investors know that evaluating an AI company requires a completely different playbook. While legacy businesses compete on market share and operational efficiency, AI companies live or die by their technology moat and data advantages.
New Rules of AI Company Evaluation
The companies that survive and thrive will be those that have built defensible positions around their core AI capabilities.
Beyond the Algorithm. Modern AI valuation focuses on algorithm performance, data quality, technical team retention, and scalability potential rather than traditional revenue multiples, according to online marketplace Flippa. The best AI companies aren’t just using existing large language models but are building fundamental improvements to how AI systems learn and perform.
Value of Data Assets. During your deep research phase, examine not just the quantity of data a company accesses but its quality, uniqueness, and legal defensibility. TechTarget advises that the most valuable AI companies often have figured out how to turn their operation into a data collection engine, creating a virtuous cycle where better performance generates more data, which enables even better performance.
Importance of Scalability. Perhaps no factor matters more for AI company valuation than scalability. As predicted by the International Data Corporation, every new dollar spent on AI solutions and services is expected to generate an additional $4.9 in the global economy, but only if those solutions can scale efficiently. The most successful AI acquisitions target companies that have solved the three critical scalability challenges: computational efficiency, marginal cost reduction, and deployment complexity.
Talent Retention and Regulation
The shortage of qualified AI researchers and engineers means that key personnel departures can devastate a company’s prospects overnight, notes Aventis. AI startup valuations have reached astronomical levels, with Series A companies commanding median valuations of $45.7 million, largely because investors are bidding for scarce talent.
During due diligence, pay special attention to employment agreements, equity structures, and the strength of technical leadership. The companies with the strongest talent retention strategies often outperform regardless of their current technology advantages.
As governments worldwide grapple with AI regulation, smart acquirers are factoring regulatory risk into their valuations. Companies operating in heavily regulated industries or those using AI for sensitive applications like healthcare, financial services, or autonomous systems face additional compliance costs and potential operational restrictions.
The savvy move is to view regulatory challenges as both risk and opportunity. Companies that have gotten ahead of compliance requirements or that operate in regulatory-friendly jurisdictions may have significant advantages over competitors.
How AI Powers Growth
The productivity gains from AI adoption are becoming impossible to ignore. A paper by the Federal Reserve Bank of St. Louis reports that workers using generative AI reported they saved 5.4% of their work hours, suggesting a 1.1% increase in productivity for the entire workforce. Meanwhile, 78% of organizations now use AI in at least one business function, up from 55% just a year earlier.
The most successful AI companies are enabling entirely new business models and creating value in ways that weren’t previously possible. Top performing companies are moving from chasing AI use cases to using AI to fulfill business strategy, treating AI as a core capability rather than a supplementary tool.
With AI-related companies garnering $5.7 billion of the $26 billion in global venture funding in January 2025 alone, the risk of overpaying for AI assets has never been higher. OpenAI was most recently reported at a $500 billion valuation.
The key is focusing on sustainable growth drivers rather than flashy demonstrations, according to Business Case Studies. Look for companies with clear paths to profitability, defensible market positions, and business models that improve with scale. The most dangerous deals are those driven purely by fear of missing out on the AI revolution.
Cutting Through the Noise
This is where sophisticated deal intelligence becomes essential. Our deep research tool, Scholar, provides the research capabilities that modern AI company evaluation demands. Instead of relying on surface-level metrics, Scholar enables comprehensive competitive benchmarking and market positioning analysis that reveals which AI companies have genuine competitive advantages.
Never have company evaluations been as seamless. Your team enters a research query in Scholar and, within minutes, our platform delivers a 20+ page report powered by our proprietary data, trusted external sources, and in-depth analysis.
When every AI company claims to be revolutionary, our deal sourcing and discovery tool helps separate signal from noise. The combination of research capabilities and deal sourcing tools in a single platform provides the competitive edge necessary to identify and secure the best AI opportunities before they become overpriced.
With mergers and IPOs in the tech sector experiencing a continued comeback in 2025, the smartest investors are those who can combine traditional due diligence rigor with a deep understanding of AI-specific value drivers. Success now requires the kind of sophisticated analysis and market intelligence that separates professional investors from the crowd.
And the first step towards standing out is reaching out to us.