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Grindr may be an “AI-first company” these days, but its CEO remains skeptical of the amount of money being thrown at certain AI companies.
The debate over whether an AI bubble is forming has reached a fever pitch in the past few months. OpenAI CEO Sam Altman recently told reporters that “overexcited” investors were practicing bubble-like behavior around the industry.
Business Insider asked the LGBTQ+ dating app’s CEO George Arison about Altman’s comments. Arison said that a “VC bubble” was forming — but that the AI incumbents have an incentive to advise against investment.
“This is how venture always works,” Arison told Business Insider. “Most VCs are actually followers, not trendsetters. A few people will set the trends, then everyone will jump in that direction and too much money will go into that space.”
Arison also warned that a lot of “great companies” would “get destroyed” because of the VC frenzy around AI. He analogized it to the late-2010s SoftBank investments.
“How many companies probably should not have taken money from SoftBank five, seven years ago?” Arison said. “Had they not done that, they might have still been around.”
SoftBank invested $9 billion in WeWork, which later filed for bankruptcy. It also invested $375 million in Zume, which has now shut down. SoftBank did not respond to a request for comment.
Arison said that the “VC bubble” was specifically forming on the “application side,” and not among the architecture or model companies.
“How many sales agents do you need?” he asked.
The bubble isn’t too worrying, though, Arison said. He called it an “inevitable component of how venture capital works.” Some companies will fail, but others will be “very, very successful,” he said.
Arison declined to speak to the OpenAI CEO’s remarks specifically, but spoke more broadly about “incumbent” AI companies that want to protect themselves.
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“If you are an incumbent large AI player, you kind of want to stop a lot of investment from going into this space because you now have a unique competitive advantage,” Arison said.
OpenAI did not respond to a request for comment.
Arison also said that the AI field was rife with competitors rapidly outpacing each other. He analogized it to his first company, Taxi Magic. Originally a Blackberry app, Taxi Magic was an early iteration of mobile car-booking company, but then Uber came along and out-innovated it.
“Cursor, which is an innovator, is being out-innovated by Anthropic because Claude Code, a lot of people would say is way better,” Arison said, before clarifying that he himself doesn’t have a preference between the two vibe-coding tools. Grindr uses both, he said.
Arison also sees innovation happening in the foundation models themselves.
“What Elon has done with Grok is actually pretty incredible,” he said. “You have other companies that have been working on these things for so long, and he created something brand-new and most likely it’s headed in the direction of it being better than anybody else.”
Ultimately, Arison said he didn’t think that VCs were over-investing in AI. He’s excited about the tech; Grindr released a slide deck with its second-quarter earnings this year about how the company was embracing gAI. (That’s pronounced “gay-I.”)
What Arison emphasized was that the money was going to the wrong places.
“VCs are herd,” he said. “Wherever the three sheep go, then everybody else follows.”
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