TechCrunch Investigation: VCs and AI Founders Inflating ARR by Up to 5x Using 'Committed' Revenue

TechCrunch·high signal

A TechCrunch investigation reveals AI startups are systematically reporting 'Committed ARR' (CARR) — future, uncollected revenue from signed-but-undeployed contracts — as traditional ARR. Spellbook CEO Scott Stevenson called it 'a huge scam,' identifying cases where reported ARR was 5x actual collected revenue. One VC confirmed CARR at some AI startups runs 70% above recognized revenue. Investors are incentivized to participate because inflated ARR attracts talent and customers.