AI investors debate valuations, bubble fears and SpaceX’s Los Angeles impact

Carter Reum and Chang Xu took the stage at StrictlyVC Los Angeles 2026 at The Aerospace Corporation Campus in El Segundo, California, for a blunt discussion about how to price AI deals in a market moving far faster than traditional venture benchmarks. The live conversation, moderated by Connie Loizos and later published on June 23, centered on whether today’s AI surge can keep outrunning the fundamentals that usually anchor private-market valuations.

Reum, co-founder and partner at M13, said the firm has $2.5 billion in assets under management and has backed 17 unicorns at seed or Series A. Xu, a partner at Basis Set Ventures, described his firm as one of the first early-stage funds focused exclusively on AI, launched in 2017 and now investing out of its fourth fund with nearly $1 billion in assets under management. Those numbers framed a debate that was less about whether AI is real and more about how much of the growth is already priced in.

The two investors focused on the hard questions now confronting venture firms: how to identify startups that can survive competition from hyperscalers, how to value companies whose annual recurring revenue is accelerating too quickly to fit older models, and whether the current run-up qualifies as a bubble. Xu argued that the growth rate is unprecedented, but said valuation discipline still matters. Reum drew comparisons with earlier technology booms and said the largest incumbent platforms may now have more of an advantage than they did in past cycles.

SpaceX also hovered over the discussion as a possible future Los Angeles catalyst. The investors considered what a SpaceX initial public offering could mean for the city’s capital markets, startup ecosystem and talent base, adding another layer to a local scene already being reshaped by AI, defense technology and advanced industry. TechCrunch positioned the event around those same themes, with the broader StrictlyVC Los Angeles program also featuring Ethan Thornton of Mach Industries, Delian Asparouhov of Founders Fund and Saif Khawaja of Shinkei Systems.

The evening was billed as a curated gathering with direct access to founders, investors and operators, and the programming reflected that mix of dealmaking and industrial strategy. Alongside venture capital and artificial intelligence, the agenda emphasized defense technology, autonomy, manufacturing and national security, underscoring how quickly the Los Angeles tech conversation has broadened beyond software alone.