The rise in seed valuations for AI seed startups indicates that these companies are commanding higher valuations, particularly those of AI companies. Pete Martin, founder of AI-powered cybersecurity company Realm, said that it's now common to see a $10 million seed round at a $40 million to $45 million post-money valuation for an AI company. Ashley Smith, general partner at Vermilion, said investors are pricing rounds "years ahead of traction" and are also moving into rounds earlier to increase startup prices and valuations. Major venture firms are also contributing to this increase in startup prices. However, smaller VC firms have an insatiable appetite for AI companies, and smaller firms can often find themselves priced out of a round due to larger firms' larger firms moving in. The rise in valuations is also attributed to the advancement of AI tools allowing founders to reach viable products and early customers faster than ever before, even among big enterprises.