Ronaldo‘s $20 Billion AI Investment Fuels Debate Over Tech Bubble Risks
december 5, 2025 – Soccer superstar Cristiano Ronaldo has made a new investment in Perplexity AI, valuing the search-focused AI company at $20 billion.While Ronaldo boasts a successful track record as a professional athlete and a $1.4 billion buisness empire, the investment is raising questions about valuations within the rapidly expanding artificial intelligence sector.
Perplexity AI operates by providing a search interface built on top of existing large language models (LLMs) developed by other companies – specifically OpenAI’s GPT-5, Anthropic’s Claude, and Google’s Gemini – offering users a choice between them via a Pro subscription.
The $20 billion valuation is especially striking when compared to Perplexity’s financial performance. The company reached approximately $100 million in annual recurring revenue in March 2025. This equates to a 200x revenue multiple, significantly exceeding typical valuations for Software-as-a-Service (saas) companies, which generally trade at 7-8x revenue. Even other high-growth AI startups average between 21-40x revenue.
The investment has prompted discussion around the “Greater Fool Theory,” a concept explored in financial literature like Burton Malkiel’s A Random Walk Down Wall Street. This theory suggests that asset prices can be driven by the belief that another buyer (“the greater fool”) will be willing to pay an even higher price, regardless of intrinsic value. Historical examples, such as Dutch Tulip Mania (1637) and the dot-com bubble (2000), illustrate the risks of such market dynamics.
The concern, as highlighted by observers, is the influx of capital from investors perhaps lacking the technical expertise to assess the underlying value of AI companies. When capital that cannot evaluate technical architecture,margin structure,or competitive advantages begins flowing into the sector at such high multiples,it warrants careful consideration.
Bubbles, according to the Greater Fool Theory, don’t burst due to increased investor intelligence, but when the supply of new buyers dries up, leaving someone to bear the losses.
Sources: Bloomberg, Invezz, Perplexity Help Center (“Perplexity gives you access to the latest AI models from OpenAI and Anthropic”), American Bazaar, Sacra Research, CNBC, TechFundingNews valuation analysis, Burton Malkiel, A Random Walk Down Wall Street, Wikipedia: Greater Fool Theory; Britannica Money.
