Veteran Apple investor Alan Patricof says AI is the 'flavor of the month'

• Venture capitalist Alan Patricof has a cautionary message about an AI bubble.
• "Everyone wants to be at an AI company — it's the flavor of the month," Patricof told the New York Post.
• Patricof recommends investing in companies utilizing AI as a tool, rather than buying AI platforms.

Alan Patricof, the venture capitalist known for his investments in Apple and Venmo, has a cautionary message about an AI bubble.

"Everyone wants to be at an AI company — it's the flavor of the month," said Patricof during a Thursday interview with the New York Post.

He added that the best way to get into AI is to get into a company that has learned how to use AI as a tool instead of buying into an AI platform.

"There are an awful lot of companies that want to go into AI and the valuations are in the billions," said Patricof, "But let's tune in 12 or 24 months from now — those companies are spending a lot of money so they may come back to the market to raise money."

The 88-year-old veteran investor has had a long career in venture capital. His past investments, under VC firms Greycroft and Apax Partners, include AOL, Apple, and Audible. Patricof was one of Apple's earliest investors.

And Patricof isn't alone in having concerns about an AI bubble.

Emad Mostaque, the CEO of Stability AI, said in July that he thinks AI will "be the biggest bubble of all time," comparing the hype around AI to the dot-com bubble of the late 1990s.

Veteran economist David Rosenberg and James Penny, the CIO of TAM Asset Management, have made similar comparisons between AI and the dot-com bubble.

To be sure, others like retired Wharton professor Jeremy Siegel and Dan Raju, the CEO of fintech and brokerage firm Tradier, disagree with the comparison.

Raju told Insider that unlike the dot-com bubble, "in 2023, we are seeing the realizations of AI benefits 'right-here, right-now' by companies."

"In 1999, company valuations and crazy P/E ratios were based on completely unproven theories of immediate realizations around the internet by companies that never materialized," he added.

Patricof did not immediately respond to a request for comment from Insider, sent outside regular business hours.