Recorded live at Seattle Tech Week, this episode of Founded & Funded brings together two people who track the AI capital markets from different vantage points: ⁨Pitchbook⁩ EVP of Research & Market Intelligence Nizar Tarhuni, and Madrona Partner Sabrina Albert.

These two dig into where AI venture capital is actually landing across the model, infrastructure, and application layers, why AI "harnesses" are becoming a winner-takes-most category, and where vertical AI applications may hold an edge that horizontal platforms can't match. They also cover PitchBook's VC Exit Predictor, the new normal for AI seed valuations, and the tranche-financing structures Nizar says are red flags for founders.

And in a live Q&A, they take on a frequently asked question in the AI market: Is this a bubble? Nizar explains why he thinks it's still too early to call, what the data says about the value already being created, and why the next few stages of company growth will tell us much more about which valuations prove durable.

For founders raising capital right now, or operators trying to figure out where durable value is emerging in AI, this conversation offers a data-grounded look at what's happening beneath the headline numbers.

Full Transcript: https://www.madrona.com/is-ai-a-bubble-what-pitchbook-nizar-tarhuni-sees-in-the-data

Chapters:
00:00 — Introduction
04:11 — The Rise of AI Harnesses
06:50 — Vertical vs Horizontal AI Applications
07:51 — Vertical AI Use Cases: Legal, Finance, Healthcare
09:25 — Are Vertical AI Companies Defensible vs OpenAI/Anthropic?
11:32 — Durability, Switching Costs & the Exit Predictor
14:44 — Open Source Models & Cost Management
18:58 — Choosing the Right Model for the Task
20:09 — Funding Environment: Seed to Series B
23:04 — Tranche Financing & Founder Red Flags
26:43 — Audience Q&A: Seattle's Role in AI, Bubble Risk & Services as Software