The views seem to range from bubble-wary to bubble-dismissive. We hashed it all out over eggs and sausages at Fortune’s IRL Term Sheet Breakfast at Brainstorm AI in San Francisco yesterday. This is Amanda Gerut, Fortune’s West Coast news editor, pinch-hitting for my colleague Allie Garfinkle.

Allie hosted five VCs with funds ranging in size from $5 million to $25 billion and views varied across the panel. This group alone is collectively going to deploy anywhere from tens to hundreds of millions over the next decade into companies with AI as a backdrop and these investments will either prove spectacularly right or wrong.

Here’s a roll call:

Jenny Xiao, partner at Leonsis Capital and former researcher at OpenAI, came in with a nuanced take. There’s something of a bubble, but it’s “relatively contained” in the infrastructure layer with overinvestment primarily in data centers, GPUs and in large language model companies. But right now, there’s actually underinvestment in the application layer because there are so many ways AI can make an impact in various enterprises, Xiao said. 

Vanessa Larco, former partner at New Enterprise Associates (NEA) and co-founder of new venture firm Premise, has a contrarian view. “Everyone thinks enterprise is safer,” Larco said. “But I actually think the consumer might, this time around in the current environment, be what survives.” Larco’s reasoning is that if a consumer adopts your AI product, it’s because you’re giving them something faster, “radically cheaper, or much easier to use.” Once you’ve done that and built a brand, it’s very hard for people to quit you. 

Rob Biederman, managing partner at Asymmetric Capital Partners and chairman of Catalant Technologies, had a sobering view. “In every boom, 99% or 99.9% of companies fail, and one or two of them become Amazon or Google,” said Biederman, who had to dash off to catch a flight. Only companies that can systematically create value for customers, which most of them aren’t doing right now, will survive. 

Aaron Jacobson, partner at NEA, said the history of technological innovation “is always overhyped in the near term and underhyped in the long term, and that will be true of AI.” So at some point there will be a correction and there will be cycles of pain around valuation and funding, “but ultimately, in 10 years, we’re going to have a lot of really big, impactful companies.”

Daniel Dart, founder and general partner of Rock Yard Ventures, had the boldest counter to fears about a bubble. He sees a total addressable market we can’t yet imagine. People think self-driving Waymos will replace Ubers, but Dart sees elementary schools and elderly care centers with Waymos waiting out front and that proves to him we’re still in the early innings. 

“You’re really going to tell me there aren’t going to be any trillion-dollar companies in 2030 or 2034? No one here is going to take that bet,” said Dart. “There is going to be so much value creation that it’s like the birth of fire.”

See you tomorrow,

Amanda Gerut
Email: Amanda.gerut@fortune.com
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Venture Deals

- Saviynt, an El Segundo, Calif.-based identity security platform, raised $700 million in series B funding. KKR led the round and was joined by Sixth Street Growth, TenEleven and existing investor Carrick Capital Partners.

- fal, a San Francisco-based AI-generated media platform, raised $140 million in Series D funding. Sequoia led the round and was joined by Kleiner Perkins, NVentures, and Alkeon Capital.

- Radial, a New York City-based network designed to help patients access advanced mental health treatments, raised $50 million in Series A funding. General Catalyst led the round and was joined by Solari Capital, SL Health Capital, Founder Collective, BoxGroup, Scrub Capital, and Diede van Lamoen.

- Relation, a London, U.K.-based developer of medicines for immunology, metabolic, and bone diseases, raised $26 million in funding from NVentures, DCVC, and Magnetic Ventures.

- Aradigm, a New York City-based benefits platform for cell and gene therapies, raised $20 million in Series A funding. Frist Cressey Ventures led the round and was joined by Andreessen Horowitz and Morgan Health. 

- Prime Security, a Tel Aviv, Israel and New York City-based AI-powered platform designed to detect and mitigate risks during software design, raised $20 million in Series A funding. Scale Venture Partners led the round and was joined by Foundation Capital, Flybridge Ventures, and others.

- Algori, a Madrid, Spain-based AI-powered shopper insights platform for the fast-moving consumer goods industry, raised €3.6 million ($4.2 million) in funding from Red Bull Ventures, Co-invest Capital, AttaPoll, and others.

- Empromptu AI, a San Francisco-based platform designed to help transition SaaS products into AI-native systems, raised $2 million in pre-seed funding. Precursor Ventures led the round and was joined by Alumni Ventures, Founders Edge, Rogue Women VC, and others.

Private Equity

- AppDirect, backed by CDPQ, acquired vCom Solutions, a San Ramon, Calif.-based IT management platform, at an enterprise valuation of more than $100 million.

- Jensen Hughes, backed by Gryphon Investors, acquired Safety Management Services, a West Jordan, Utah-based fire and life safety company. Financial terms were not disclosed.

- New State Capital Partners acquired a majority stake in Harrell-Fish, a Bloomington, Ind.-based mechanical installation and maintenance services provider. Financial terms were not disclosed.

- PestCo Holdings, a portfolio company of Thompson Street Capital, acquired Southwest Exterminating, a Houston, Texas-based pest control provider. Financial terms were not disclosed.

- Prosperity Partners, backed by Unity Partners, acquired a majority stake in Farkouh, Furman & Faccio, a New York City-based provider of tax, attest, accounting and business consulting services. Financial terms were not disclosed.

- SEVA acquired a minority stake in Pronto, a Lehi, Utah-based team communications platform designed for front–line employers and higher education institutions. Financial terms were not disclosed.

Exits

- Arcline Investment Management acquired Altronic, a Girard, Ohio-based supplier of ignition, control, and instrumentation systems for critical infrastructure power systems, from HOERBIGER Group. Financial terms were not disclosed.

- Berkshire Partners agreed to acquire United Flow Technologies, an Irving, Texas-based process and equipment solutions company for water and wastewater systems, from H.I.G. Capital. Financial terms were not disclosed.

- Bessemer Investors acquired Xanitos, a Newtown Square, Penn.-based provider of environmental services, patient transport, patient observation, and linen services, from Angeles Equity Partners. Financial terms were not disclosed.

- Share Rock Partners acquired a majority stake in AMAG Technology, a Hawthorne, Calif.-based physical security solutions provider, from Allied Universal.