You.com received a $1B valuation on under $20M in revenue
Ed Zitron · Are AI's Economics Unsustainable? — With Ed Zitron · Jul 23, 2025 · at 24:59
Ed Zitron critiques what he considers inflated venture capital valuations across AI startups relative to their revenue.
0:00 / 0:13exact quote · 13.3s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“You go and you see, like, a company like u.com. Everyone's saying, wow, they got a valuation of a billion dollars. Annualized revenue of, like, oh, I'm gonna misquote this. It was, like, 12,000,020 million dollars. That's insanely small, man.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Ed Zitron
Sam Altman is highly effective at convincing executives to fund AI
“Sam Altman is the single most gifted business idiot whisperer of all time. He convinced, look at what he's done. I think he's reprehensible, a real scumbag, but I cannot ignore the work he's doing.”
OpenAI has no viable path to profitability, Zitron argues
“They also have no path to profitability. They don't have one.”
OpenAI effectively operates as a Microsoft subsidiary, Zitron argues
“OpenAI is a Microsoft subsidiary. That's what everyone needs to just accept right now, and what's happening in the news, which I imagine we'll talk in a bit.”
VCs rarely inspect accounts or codebases when investing in AI startups
“I had someone tell me, a source tell me, that there are, it's very rare that venture capitalists see the books, the actual accounts, and they almost never see the code base.”
OpenAI is an asset-light company relying heavily on shared Microsoft IP
“OpenAI is an asset-light business with research and IP that's owned by another company. They don't have much to trade other than their name.”
Perplexity gave $30 million in discounts to reach 50 million users
“Well, first of all, they're an insanely badly run company. They did, like, thirty-five million. They lost, I forget exactly how much they lost, but they did refunds or discounts of, like, thirty million dollars. They're literally giving money away to make peop…”