If you talk to many early-stage investors, they'll say they're now living in two different worlds.

Part of their day is filled with reviewing pitches of startups that show the exciting potential of generative AI, and the other part is spent helping their existing portfolio companies survive the slump.

This dichotomy between generative AI and all other startups is evident in valuations data.

Compared to 2022, median pre-money valuations for early-stage rounds of generative AI companies have jumped by 16% so far this year, according to PitchBook data. Meanwhile, prices for all other startups raising a Series A or Series B have dropped by nearly 24%."

The bifurcation is huge," said Sundeep Peechu, a general partner at Felicis Ventures. "There is a general euphoria that, 'wow, generative AI has revolutionary potential.'"

Some generative AI startups with no revenue at all can now raise Series A rounds at valuations of around $250 million, according to Peechu.

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