Mega AI deals enable exits for private equity – but fuel 'frothy' bubble fears (www.cnbc.com)

Buoyant public markets tied to the AI boom have reopened IPO and M&A channels that were largely frozen after the 2022 shift away from zero rates, giving private equity a vital exit route. Big corporations are paying premiums for AI firms and a handful of high-profile listings (eg, Klarna’s successful IPO) and deals—most notably Eurazeo’s near-$1 billion sale of customer-support automation company Cognigy to NiCE—are signaling renewed liquidity. Firms such as Verisure are also pursuing major listings (targeting €3.1 billion), and an AI narrative is increasingly treated as a near-prerequisite for public offerings. But senior industry figures warn the market is “frothy”: intense competition for AI assets has pushed revenue multiples into the dozens or even 50–100x range, raising dot‑com–era comparisons and pricing risks of future obsolescence that are hard to quantify (some investors estimate a ~5% chance a business model could be invalid in a decade). As a result, many investors are shifting toward startups with proven cash flows and concrete ROI—companies that deploy AI to solve costly, immediate problems (Cognigy claimed automating 70–80% of customer support for clients like Allianz and Lufthansa). The technical implication for dealmakers: prioritize defensible, revenue-generating AI use cases over speculative platform plays to manage valuation risk and ensure monetizable exits.