How VCs and founders use inflated ‘ARR’ to crown AI startups

TechCrunch says some AI startups are publicly inflating ARR by counting contracted or unimplemented revenue as if it were current revenue.

The practice can distort comparisons between startups and make growth look stronger than it really is.

Some investors appear to know and accept the metric games, but founders are criticizing the lack of transparency.

The controversy is renewing scrutiny of how startups report public revenue and traction metrics.