Is the AI space a bubble waiting to burst?
At our recent Open Mic, we invited two founders operating at the sharp edge of the AI world:
Nico Klein, co-founder of Singulate, which raised $2.5M at pre-seed with a US lead investor
Chen Wang, CTO of 5th Dimension AI, which raised £12M and used it to expand aggressively into the US
What followed was a brutally honest conversation about AI’s current limitations, whether we’re in a bubble, and what founders should be doing now to survive.
1. The AI Adoption Gap Is Widening
One of the first topics on the table was adoption — or the lack of it.
Corporates, especially in the UK and Europe, are still hesitant. Chen described the contrast:
“In the US, companies are clear: the AI budget comes from cutting headcount. It’s brutal — but honest. In the UK, companies still hide behind the idea of ‘productivity gains’.”
That difference matters because it drives urgency. US companies are willing to invest quickly and decisively, while UK and European corporates are slower to make moves.
Nico warned that this hesitation could have real consequences:
“In a year or two, a lot of people who haven’t adapted will simply be left behind.”
And it’s not just about adoption by companies — it’s about individuals too. People who don’t learn to use AI effectively risk becoming irrelevant in a market that is demanding faster outputs and leaner teams.
2. The Closing Gap Between AI’s Capabilities and Potential
Another theme was how fast AI’s capabilities are catching up to its potential.
Chen reminded the audience what GPT-3 looked like just a few years ago:
“Three years ago, the answers were often vague or flat-out wrong. Today, ChatGPT and other models can do in two hours what used to take humans a week.”
This rapid improvement is dangerous for founders building thin, tool-based products. Chen pointed out that companies like Lovoable, once celebrated as up-and-coming AI startups, could easily be made irrelevant if OpenAI or Google release a single new feature that encroaches on their niche.
“You might build something useful now,” Chen said, “but OpenAI could release something tomorrow that makes you irrelevant.”
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3. Tools Alone Won’t Save You — You Need Outcomes
The conversation repeatedly circled back to one core message: shipping tools is not enough.
Chen was clear:
“If you’re just shipping AI tools, you’re dead. You need to deliver outcomes.”
At 5th Dimension AI, half the team are industry experts embedded with customers. They don’t just hand over a platform and hope for the best — they work directly with clients to deliver measurable business results.
This approach creates defensibility. A generic “AI-powered” SaaS platform can be replicated or outcompeted by a bigger player, but a solution tied deeply to customer outcomes is harder to replace.
4. Are We in a Bubble?
The inevitable question: is AI in a bubble?
The short answer from both founders: probably. But Nico added an important nuance:
“Even if you invested at the peak of the dot-com bubble, you still made money on Amazon. The key is building something real.”
Chen agreed, noting that AI is fundamentally different from past bubbles like crypto:
“AI is useful and dangerous. It will underpin entire industries. But many startups will still disappear.”
Nico also pointed out the macroeconomic risk:
“Fundraising can dry up overnight if the market shifts. Founders need to plan accordingly.”
5. Funding: Rethink the Playbook
Both founders stressed that raising VC money is no longer the automatic first step for AI startups.
Chen was especially direct:
“You don’t need VC money to validate your startup anymore. The cost of building is low. Ship something, sell it, test it. If it works, then scale. If it doesn’t, kill it and move on fast.”
The old playbook — raise a big round and figure things out later — doesn’t fit a market where AI capabilities are advancing at breakneck speed.
6. What Founders Should Do Now
Here are the core takeaways from the event:
Build defensible solutions, not thin tools. Generic SaaS will be eaten alive by bigger players.
Stay close to customers and their outcomes. Solve real problems and measure the impact.
Move fast and be ruthless. If something isn’t working, pivot or shut it down quickly.
Don’t rely on VC validation. You can test and iterate without a big round. Macro conditions can shift overnight.
The Reality Check
AI is not going away. It’s not like crypto. It’s already transforming industries and creating efficiencies that were unthinkable just a few years ago. But the speed of change means that many startups — even well-funded ones — could disappear in months, not years.
If you’re a founder in this space, ask yourself:
Could OpenAI, Google, or another big player wipe out my product with one release?
Am I solving a real problem or just building another tool?
Am I moving fast enough to outpace the market?
Because one thing was clear from this conversation: the clock is ticking.
✅ This isn’t just another AI hot take. Pass it on to a founder who needs to hear it.
It’s time for a POLL (👉 Vote now — we’ll share the results in next week’s issue. All votes are anonymous)😀
Are 90% of today’s AI startups doomed?
INDUSTRY PULSE 🩺
(Last week’s poll results)
👉 If you’re not willing to work weekends as a founder, should you even be one?
SUPPORTER SPOTLIGHT 🎤
This month’s supporter shoutout goes to Davide Pagnotta, co-founder and CEO of Wise Humanity – a leadership training company helping senior managers and team leaders of hybrid, multicultural teams build confidence, overcome imposter syndrome, and create cohesive, high-performing teams.
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Raise Smarter: VC Tactics Exposed
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Runway East Bloomsbury, 24-28 Bloomsbury Way, London, WC1A 2SN, UK
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Open Mic Pitching and Networking - DEFENCE Special
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Blue Marlin Ibiza London, 45 Curtain Rd, London, EC2A 3PT, UK
Mon 18 Aug, 18:00 - 22:30 BST
Rare Founders
🇧🇪🇬🇧 Embassy Pitching Series: UK & Belgium
On 7 October, we’re teaming up with the Embassy of Belgium in London to host a special cross-border demo day. Expect 20-30 promising startups from Belgium (Flanders & Brussels) and the UK pitching to an audience of investors, followed by drinks, networking, and a DJ set.
Whether you want to pitch or just come along to meet founders and investors, the waitlist is now open.
🗓 Application deadline: Sep 5th 11:59PM
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Belgian Embassy Residence, 36 Belgrave Square, London, SW1X 8QB
Tue 7 Oct, 14:30 - 22:00 BST
OTHER LONDON EVENTS🌟
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Startup Breakfast
Tech Startup Networking
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11-16 Dering Street, London, W1S 1AR, UK
Thu 31 July, 08:00 - 10:00 BST
The Entrepreneurs Network
Ecosystem Builders Meetup
Join this informal morning meetup that brings together leaders and organisations driving startup innovation and strengthening the UK’s entrepreneurial ecosystem. Attendees will connect over coffee and conversation, fostering collaboration and shared success within the innovation community.
In-person event
Portsmouth Street Area, London, UK
Thu 31 July, 10:00 - 11:00 BST
Silicon Mingle
July Mingle with Creative UK
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Online event
Thu 31 July, 19:00 - 19:30 BST
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Business Networking Event
This business networking event offers a relaxed yet upscale environment for tech entrepreneurs, startup founders, investors, and professionals to build meaningful connections and explore growth opportunities. Attendees can engage with like-minded peers, exchange ideas, and discover the latest trends in technology and business within an intimate, collaborative setting.
In-person event
66 Great Queen Street, Bar Sycamore London, WC2B 5BX, UK
Thu 31 July, 19:00 - 22:00 BST
AI Engine
Summer Hack
Join a two-day AI hackathon that bring together over 150 top engineers and innovators to build real-world solutions across conversational AI, productivity, search, and fun projects. Participants can join as hackers or startups, gain access to expert mentors, perks, and prizes, and collaborate with London’s leading AI community.
In-person event
Stratford Area, London, UK
Sat 2 Aug, 8:00 BST
Entrepreneurs First
Design Machines
This hackathon brings together design engineers to craft innovative, AI-native interfaces using cutting-edge image generation and prototyping tools. Participants will tackle challenges exploring systems for AI agents, invisible interfaces, and solutions for underserved user groups.
In-person event
Hoxton Area, London, UK
Sat 2 Aug, 10:00 - 18:00 BST
PLUGGED
Founder vs Funder Games | Round 1 | Five-A-Side Footie
Join a tournament that puts founders and funders head-to-head in three intense games designed to test strategy, stamina, and skill. From football to poker to boxing, each round pushes participants to prove who truly has the edge under pressure.
In-person event
Salter Rd Area, London, UK
Mon 4 Aug, 18:00 - 21:00 BST
Startup Connect
Pitch & Networking Event: BioTech, Medtech, Pharma
A high-energy gathering for biotech, medtech, and pharma innovators, this event offers open pitching and targeted networking for startups, investors, and industry experts. Attendees exchange ideas, share expertise, and build meaningful connections within the life sciences ecosystem.
In-person event
52 Fulham Rd., South Kensington, London, SW3 6HH, UK
Mon 4 Aug, 19:00 - 22:00 BST
SeedLegals
Taxes & IP Transfers
This expert-led session provides UK startups with a practical guide to navigating the financial, legal, and operational complexities of a Delaware Flip when expanding to the US. Attendees gain insights into tax implications, compliance challenges, and strategies for running dual UK-US structures smoothly.
Online event
Mon 4 Aug, 16:00 - 17:00 BST
Novabook
Debt, Equity & Drinks With Creator Fund x TechCredit Partners
Join a session that offers founders a clear understanding of equity and debt financing, exploring when each option makes sense and how to maintain control while scaling. Attendees gain insights into what funders look for, common funding mistakes, and whether debt might be a smarter path for their stage.
In-person event
6 Alie St, London, E1 8QT, UK
Wed 6 Aug, 18:30 - 21:00 BST
AI Native Developer
⚡ AI Tooling in the SDLC: Hackathon
A hackathon focused entirely on AI challenges developers to create agent-based tools that transform every stage of the software development lifecycle. Participants will compete to build innovative solutions that test smarter, deploy faster, and redefine how modern software is built.
In-person event
Northdown Area, London, UK
Thu 7 Aug, 09:00 - 20:00 BST
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Vasily Alekseenko
Founder
@ Rare Founders
Rare Founders - building the bridge between founders and investors via regular in-person and online events, meetups, conferences.
