VC Mailbox: The Most Overhyped Deeptech Trend in 2025—Don’t Fall for It!
Your Weekly Shortcut to Deeptech Investing — Trends, Startup Intel & Investor Playbooks for VCs & Angels in 5 Minutes or Less
I got a spicy question from one of you this week: “What’s the most overhyped deeptech trend in 2025?” It’s a hot topic with $100 billion pouring into AI alone this year, and not all bets are paying off. Just this week, the shine’s coming off one overhyped darling, and smart money’s shifting fast. As of May 6, 2025, I’m diving into why generative AI’s losing steam, what’s stealing the spotlight, and how you can dodge the hype to score 5-10x returns. Let’s unpack this and make sure your cash lands on real winners!
What’s the Buzz About Overhyped Trends?
Deeptech’s a goldmine—AI, biotech, quantum—but not every trend lives up to the hype. Investors are pouring $100 billion into AI startups in 2025, but picking the wrong horse can burn capital fast (Crunchbase, January 2025). Overhyped trends suck in money with big promises, only to stall when they can’t deliver ROI. This week, posts on X and a new report lit up the truth: generative AI, the darling of 2023, is taking a hit as 58% of enterprises say they’re seeing no measurable return on their investments (MIT Sloan, May 4, 2025; X posts, May 2025). That’s a wake-up call, and it’s pushing savvy investors to fresher fields.
So, what’s the most overhyped trend? Generative AI’s $60 billion bubble is deflating fast. Only 8% of firms using it have reached mature adoption, despite the hype around tools like ChatGPT (Informa TechTarget, September 2024). Meanwhile, agentic AI and post-quantum cryptography (PQC) are stealing the show, with startups like xAI and QuSecure landing big wins (Crunchbase, May 2024; Crunchbase, July 2024).
Why Generative AI’s Hype Is Fading
Generative AI—think text, images, or videos whipped up by AI—was the poster child of 2023, with $60 billion invested by 2024 (CB Insights, March 2025). But it’s hitting a wall:
Low ROI: 58% of enterprises report no clear returns, as tools churn out generic content needing heavy human fixes (MIT Sloan, May 4, 2025). Only 8% have mature setups (Informa TechTarget, September 2024).
Stalled Startups: 70% of 2024 generative AI startups are stuck, lacking enterprise traction or unique value (CB Insights, March 2025).
Market Noise: Buzzwords like “AI-powered” flood pitches, but most lack real impact—think AI blog posts that read like spam (TechNewsWorld, December 19, 2024).
This week’s skepticism on X and MIT Sloan’s report show the tide’s turning (X posts, May 2025; MIT Sloan, May 4, 2025). Investors are done with shiny toys—they want tech that delivers.
The Real Winners Stealing the Spotlight
While generative AI fizzles, two trends are lighting up:
Agentic AI: Autonomous AI that does tasks like coding or data analysis is a $5 billion market in 2025, set to hit $50 billion by 2030 (Gartner, February 2025). xAI’s Grok 3 automated 40% of Pfizer’s trial data this week with 95% accuracy, sparking a $500 million round rumor at $30 billion (Forbes, May 4, 2025; X posts, May 2025). It cuts costs 30% vs. LLMs, making it an enterprise darling (TechCrunch, February 2025).
Post-Quantum Cryptography (PQC): With quantum computers threatening to crack encryption, PQC’s $1 billion market could hit $5 billion by 2030 (Gartner, February 2025). QuSecure’s $5 million DARPA contract this week boosted its $60 million valuation, aligning with Samsung’s 12 Q1 2025 patents (Crunchbase, May 2025; USPTO, April 2025; X posts, May 2025).
These trends are grounded—xAI’s Pfizer pilot and QuSecure’s DARPA deal show real traction, not just hype (Forbes, May 4, 2025; Crunchbase, May 2025). They’re where the 5-10x returns are hiding.
Why This Matters for You
Overhyped trends like generative AI waste your capital—70% of its startups stalled in 2024, burning through $42 billion with little to show (CB Insights, March 2025). Spotting the real winners, like agentic AI and PQC, can turn a $1 million bet into $5-10 million by 2028. xAI’s $30 billion valuation could hit $100 billion, like OpenAI’s $157 billion leap (Forbes, December 24, 2024), while QuSecure’s $60 million is a steal for a $1 billion exit (PitchBook, January 2025). With $100 billion in AI funding and valuations doubling (seed caps hit $30 million in 2024), you need to move fast before VCs jack up prices (Crunchbase, January 2025; PitchBook, April 2025).
This week’s shift—generative AI’s ROI flop and xAI’s Pfizer buzz—says it’s time to pivot (MIT Sloan, May 4, 2025; Forbes, May 4, 2025). Don’t get stuck in last year’s hype.
Your Investor Playbook
Here’s how to dodge the hype and bet on winners:
Shift to Agentic AI: Invest $1-5 million in $100-500 million startups like xAI or Sierra ($175 million, 2024) with enterprise contracts. Check Crunchbase for Pfizer or Stripe pilots (Forbes, May 4, 2025; Crunchbase, 2024).
Back PQC Startups: Put $1-5 million into $50-100 million players like QuSecure or PQShield ($37 million, 2024) with government deals. Verify contracts on SAM.gov (Crunchbase, May 2025; SAM.gov, 2025).
Avoid Generative AI Traps: Skip startups without enterprise traction—80% lack it (CB Insights, March 2025). Look for pivots to agentic or reasoning AI (Gartner, February 2025).
Vet Contracts: Demand proof of pilots or grants—xAI’s Pfizer deal and QuSecure’s DARPA contract are gold (Forbes, May 4, 2025; Crunchbase, May 2025).
Diversify Bets: Mix agentic AI (Sierra, $1 billion), PQC (QuSecure, $60 million), and biotech (BioHeart, $70 million) to hedge risks (Crunchbase, 2025; BioSpace, May 3, 2025).
Risks to Watch Out For
Hype’s tricky—here’s what to dodge:
No ROI: Generative AI’s 58% ROI failure rate is a red flag; only 8% of firms see mature use (MIT Sloan, May 4, 2025; Informa TechTarget, September 2024).
Crowded Market: 70% of generative AI startups stalled in 2024, with $42 billion wasted (CB Insights, March 2025). Avoid me-too pitches.
Big Tech Rivals: Microsoft’s $500 million Copilot push threatens smaller players (TechCrunch, December 2024). Agentic AI needs strong contracts to compete.
Execution Risks: PQC startups face scaling hurdles—QuSecure’s DARPA deal helps, but tech’s complex (Gartner, February 2025; Crunchbase, May 2025).
Mitigate risks by focusing on startups with verified contracts (SAM.gov) and enterprise traction (Crunchbase). Skip pitches heavy on “AI-powered” buzzwords without pilots (TechNewsWorld, December 19, 2024).
Why This Is Your Moment
Generative AI’s bubble is popping—58% of enterprises are done with it, and this week’s X chatter proves investors are pivoting (MIT Sloan, May 4, 2025; X posts, May 2025). Agentic AI and PQC are the real deals, with xAI’s Pfizer trial and QuSecure’s DARPA win showing the way (Forbes, May 4, 2025; Crunchbase, May 2025). A $1 million bet on a $100 million startup could yield $5-10 million by 2028, but valuations are climbing fast (PitchBook, April 2025).
Want to follow the real journey of investing in the next $1B tech plays? Join me on my Instagram journey @eden_jana — I’m sharing the signals, startup bets, and behind-the-scenes deeptech moves VCs don’t talk about.
You’re already in the inner circle—now let’s turn those $1M bets into $5M wins.
Stay sharp,
Eden Djanashvili
Author Invest Deeptech