Billionaire tech investor Orlando Bravo says 'valuations in AI are at a bubble'

watch now5:1005:10Orlando Bravo: AI valuations are in a bubbleSquawk on the StreetThoma Bravo co-founder Orlando Bravo said valuations for artificial intelligence companies are "at a bubble," comparing it to the dot-com era.But one key difference in the market now, he said, is that large companies with "healthy balance sheets" are financing AI es.Bravo's private equity firm boasts more than $181 billion in assets under management as of June, and focuses on buying and selling enterprise companies, with a significant chunk of its portfolio invested in cybersecurity.Bravo told CNBC's "Squawk on the Street" on Tuesday that investors can't value a $50 million annual recurring revenue company at $10 billion."That company is going to have to duce a billion dollars in free cash flow to double an investor's money, ultimately," he said. "Even if the duct is right, even if the market's right, that's a tall order, managerially."Read more CNBC newsInside Rivian's design factory and the story behind those distinct headlightsAppLovin stock tanks on report SEC is investigating company over data-collection practicesOpenAI looks to take 10% stake in AMD through AI chip deal worth billionsCerebras CEO explains IPO withdrawal, says AI chipmaker still intends to go publicOpenAI recently finalized a secondary sale that would value the ChatGPT maker at $500 billion. The company is jected to make $13 billion in revenue for 2025.Nvidia recently said it would invest up to $100 billion in OpenAI, in part to help the ChatGPT maker lease its chips and build out supercomputing facilities in the coming years.Other public companies have soared on AI mises, with Palantir's market cap climbing to $437 billion, putting it among the 20 most valuable publicly traded companies in the U.S., and AppLovin now worth $213 billion.Even early-stage valuations are massive in AI, with Thinking Machines Lab notching a $12 billion valuation on a $2 billion seed round.Despite the inflated numbers, Bravo emphasized there's a "big difference" between the dot-com collapse and the current landscape of AI."Now you have some really big companies and some big balance sheets and healthy balance sheets financing this activity, which is different than what happened roughly 25 years ago," he said.watch now9:4609:46Oracle s fall on report the company is struggling to make money renting out Nvidia chipsHalftime Report