SAN FRANCISCO, CA / ACCESS Newswire / November 3, 2025 / Tamar Toledano, a marketing strategist who works closely with emerging startups, is sounding an alarm about what she calls the new wave of tech inflation. She believes the growing disconnect between real innovation and inflated valuations in the AI sector is creating a fragile ecosystem where perception often outruns performance.
"AI is no longer a niche field. It has become a branding tool," she explains. "Many startups use the term to sound advanced, but investors and customers should ask whether the technology is central to the product or simply added to raise capital and visibility."
In 2025, the AI investment boom has reached record levels. Venture capital flowing into AI-related startups has surpassed that of fintech and climate tech combined. Yet sustainability remains uncertain. Many early-stage companies have achieved billion-dollar valuations without stable business models or proven use cases. Tamar Toledano calls this the illusion of inevitability. It is the belief that being linked to AI guarantees success.
She draws parallels to past technology bubbles but says this one is faster and broader. "Earlier waves built up slowly before the peak," she says. "The AI surge moved from discovery to saturation almost overnight. Everyone wants to be part of the story, and that urgency fuels distortion."
Tamar Toledano sees the issue reflected in how startups market themselves. In her work advising founders, she often notices bold promises that lack substance. Startups speak of "smart automation" or "predictive insights" without clearly explaining how these tools work or what value they create. "It has become a race to appear intelligent rather than to solve intelligently," she says.
This kind of messaging has real consequences. When valuations grow faster than performance, teams face pressure to deliver results that are not yet possible. Founders rush development, stretch their budgets, and make public claims they cannot support. The result is a fragile foundation built on hype rather than stability.
Tamar Toledano believes both investors and founders must shift their approach. Investors should ask more profound questions about how AI supports the mission rather than accepting vague claims. Founders should focus on evidence and resist exaggeration. "There is nothing wrong with ambition," she says. "But ambition needs to be grounded in proof. Otherwise, you are marketing a promise instead of a product."
She warns that unchecked hype can damage more than individual companies. If too many AI startups fail to deliver, the entire sector could lose credibility. "Once confidence fades, even the good players get caught in the collapse," Toledano explains. "The market punishes exaggeration harshly, especially after a gold rush."
According to her, the most credible AI startups today are the quiet ones. They focus on practical applications such as model efficiency, data transparency, and safety. They prefer steady progress to sweeping claims. "Quiet innovation is the cure for inflated storytelling," she says. "The companies that last will understand the difference between marketing potential and building trust."
Tamar Toledano also notes that the bubble is distorting marketing itself. With every company claiming to be "AI-driven," differentiation has become harder. "When everyone uses the same words, they stop meaning anything," she says. "Real distinction will come from clarity. A brand must explain what its technology actually does and why it matters to the customer."
For Toledano, the lesson goes beyond artificial intelligence. It is about the relationship between markets and stories. Hype can draw attention, but attention without authenticity quickly fades. "Every startup story is really a trust story," she concludes. "You can create excitement, but you cannot replace honesty. The companies that endure will grow their credibility as fast as they grow their technology."
As the AI boom continues, her advice to founders is direct. Stop selling the future and start proving the present. Overall, Toledano's call for a balance between imagination and practicality.
To learn more visit: https://tamartoledanosf.com/
Contact Tamar Toledano:toledano@tamartoledano.com
SOURCE: Tamar Toledano
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