I’d recommend you check out our annual list of the most promising startups, which we published this morning and includes companies across artificial intelligence, consumer, cybersecurity, crypto and more.

Each year, it gets harder and harder to come up with our final list of AI applications and infrastructure startups. Part of that is due to the explosion of AI startups and the sheer number of them we have to sift through. But honestly, the more limiting factor this time around was the fact that our list only includes startups valued less than $1 billion that have raised less than $100 million in funding.

These days, it seems like any AI startup that has a hint of revenue immediately gets a preemptive term sheet at a $1 billion-plus valuation. So while in the past, the AI startups on our list typically had more than $20 million in annualized revenue, this year’s list largely maxes out at $20 million in ARR, especially in the case of AI applications.

It goes to show how desperate investors are to get in early with any startup that shows a bit of revenue traction, especially if they missed out on investing in giants like OpenAI and Anthropic.—Stephanie Palazzolo

Here’s what else is going on…

Anthropic’s Fast Path to Profits

OpenAI has a habit of overshadowing most other AI model makers, from relentless announcements on computing and new products, to a valuation that would place it in the top 20 of S&P 500 companies, if it were public. But the younger and smaller Anthropic may be able to one-up OpenAI on one criterion: how quickly it generates cash.

As Sri reported this morning, Anthropic has projected burning another $6.1 billion over this year and next. It expects to become cash-flow positive as early as 2027, generating $3 billion in cash that year, and producing as much as $17 billion in cash the following year.