Billionaire tech investor Orlando Bravo, co-founder of private equity firm Thoma Bravo, has warned that valuations in the artificial intelligence sector are reaching bubble-like levels, drawing comparisons to the dotcom boom of the late 1990s. However, he noted a key difference today: unlike in the past, major corporations with strong financial positions are now funding AI ventures, providing a safety net that wasn’t present during the earlier tech frenzy. Speaking on CNBC’s “Squawk on the Street,” Bravo emphasized the disconnect between current market valuations and realistic financial performance. He pointed out that it’s unreasonable to assign a $10 billion valuation to a company generating only $50 million in annual recurring revenue. “That company is going to have to produce a billion dollars in free cash flow to double an investor’s money, ultimately,” he said. “Even if the product is right, even if the market’s right, that’s a tall order, managerially.” Thoma Bravo, which manages over $181 billion in assets as of June, specializes in acquiring and growing enterprise technology companies, with a significant portion of its portfolio focused on cybersecurity. Bravo’s comments reflect growing skepticism among seasoned investors about the sustainability of sky-high AI company valuations, especially as many startups struggle to translate hype into long-term profitability. While he acknowledged the transformative potential of AI, Bravo stressed that sound financial discipline and realistic expectations are essential. His remarks come amid a broader market conversation about whether the current AI investment surge is driven by genuine innovation or speculative fervor.