Ravi Mhatre, partner, Lightspeed
Anthropic backer Lightspeed Venture Partners is of the view that artificial intelligence is in a valuation bubble but said the underlying technology shift is still one of the most powerful in decades. Ravi Mhatre, cofounder and managing partner at Lightspeed, told ETtech's editor Samidha Sharma at the firm's headquarters in Menlo Park, California, that the current frenzy around AI funding reflects a “once-in-a-generation shift”, even as questions mount over circular deals and frothy valuations in the space.
“Yes, we are in a bubble, but that does not make the transformation any less real,” Mhatre said. “AI is a once-in-a-generation shift, and the capital chasing it reflects that. Both can be true: hype exists, but so do enduring opportunities," he added.
Lightspeed manages more than $28 billion globally, and has led some of the most closely watched AI deals, including a $3.5 billion round in Anthropic earlier this year, and backed Elon Musk’s xAI, France’s Mistral and Indian foundation model startup Sarvam AI, among others.
Mhatre said the real test for this cycle will be separating durable businesses from speculative bets. “The key is to identify which technologies will sustain once the noise fades. Many speculative models will collapse, but those solving real problems will endure,” he said.
On how Lightspeed is underwriting today’s sky-high price tags, Mhatre pointed to the pace of technological progress in AI. “AI’s evolution is exponential, not linear. Each leap in capability multiplies impact rather than adding incrementally,” he said, adding that while valuations are high, value creation over the next decade could surpass previous tech cycles like the internet and smartphones.
Bejul Somaia, longtime India lead at Lightspeed and now US-based partner, said the firm is trying to stay disciplined as dealmaking accelerates. “Hype cycles blur risk perception. Every company with early traction cannot command billion-dollar valuations,” he said. “Most of our capital goes early, and we double down selectively on clear winners.”
As one of the most active early-stage investors in Silicon Valley and India in AI, how difficult is it to compete with the Big Tech and hyperscalers? "Not every startup will be a unicorn, but even smaller outcomes can be meaningful if you enter early. Over the next decade, entire sectors will be rewired by AI. We are already seeing it in verticals like law and healthcare, from patent research to medical billing. As the cost of intelligence falls, these niches expand quickly. We have backed Skild AI in robotics and companies like Glean and Abridge in healthcare," Somaia said.
Also Read: ETtech Interview: Lightspeed’s Ravi Mhatre & Bejul Somaia on the AI bubble, India opportunity & more
“Yes, we are in a bubble, but that does not make the transformation any less real,” Mhatre said. “AI is a once-in-a-generation shift, and the capital chasing it reflects that. Both can be true: hype exists, but so do enduring opportunities," he added.
Lightspeed manages more than $28 billion globally, and has led some of the most closely watched AI deals, including a $3.5 billion round in Anthropic earlier this year, and backed Elon Musk’s xAI, France’s Mistral and Indian foundation model startup Sarvam AI, among others.
Mhatre said the real test for this cycle will be separating durable businesses from speculative bets. “The key is to identify which technologies will sustain once the noise fades. Many speculative models will collapse, but those solving real problems will endure,” he said.
On how Lightspeed is underwriting today’s sky-high price tags, Mhatre pointed to the pace of technological progress in AI. “AI’s evolution is exponential, not linear. Each leap in capability multiplies impact rather than adding incrementally,” he said, adding that while valuations are high, value creation over the next decade could surpass previous tech cycles like the internet and smartphones.
Bejul Somaia, longtime India lead at Lightspeed and now US-based partner, said the firm is trying to stay disciplined as dealmaking accelerates. “Hype cycles blur risk perception. Every company with early traction cannot command billion-dollar valuations,” he said. “Most of our capital goes early, and we double down selectively on clear winners.”
As one of the most active early-stage investors in Silicon Valley and India in AI, how difficult is it to compete with the Big Tech and hyperscalers? "Not every startup will be a unicorn, but even smaller outcomes can be meaningful if you enter early. Over the next decade, entire sectors will be rewired by AI. We are already seeing it in verticals like law and healthcare, from patent research to medical billing. As the cost of intelligence falls, these niches expand quickly. We have backed Skild AI in robotics and companies like Glean and Abridge in healthcare," Somaia said.
Also Read: ETtech Interview: Lightspeed’s Ravi Mhatre & Bejul Somaia on the AI bubble, India opportunity & more