Tuesday, 08 September 2026 PDT | 07:57 AM
The 1 News Alt Logo Text Smart News for Global Indians

AI Startups Are Counting Signed Contracts as Real ARR, VCs Admit

Technology September 08, 2026 07:00 PM
AI Startups Are Counting Signed Contracts as Real ARR, VCs Admit

AI Startups Are Counting Signed Contracts as Real ARR, VCs Admit

VCs privately admit they know which AI startups are inflating annual recurring revenue by counting signed-but-unpaid contracts, free pilots, and steep multi-year discounts as if they were collected cash. TechCrunch reported that some startups claim over $100 million in ARR when only a fraction comes from paying customers. The gap between CARR and real revenue is becoming the industry's quietest open secret.