How Can Investors Continue Funding AI Developers?

One of the earliest AI Agenda newsletters in August 2023 made the bear case for large language model developers. Over the last year-and-a-half, our predictions from that day seemed to largely come true, as model makers like OpenAI moved more into applications and cheap AI releases from DeepSeek and others threatened the margins of those selling AI models to developers.

So why then, has the flood of new model makers with no product, let alone revenue, continued unabated?

The latest two examples are Ilya Sutskever’s Safe Superintelligence and Mira Murati’s Thinking Machines Lab. Safe Superintelligence is reportedly in talks to raise at a $30 billion valuation, less than a year after it was cofounded by the former OpenAI chief scientist and has no immediate plans for commercial products. Meanwhile, Murati announced her new lab on Tuesday in an extremely vague blog post that clarified little about what its approach would actually be. (You would have learned more from our scoop on the startup last month!)

Clearly, investors must be taking more than projections for currently nonexistent revenue into account when deciding to back these startups.