I'll tell you why you won't. Because you wouldn't get it. Because it's not that easy.

Mira Murati is not some rando off the street. Ilya Sutskever is not some rando. Zuckerberg is not paying Millions to randos of the street to come work for meta.

When proposing a model for evaluating startup investments -- or any decision-making framework -- it’s useful to run a kind of regression test.

Would Shark Tank have funded the most successful startups of the past decade? In many cases, no. They famously passed on companies like Airbnb, Uber, and Dropbox early on (sometimes indirectly via pitch decks or missed introductions), and even directly rejected DoorDash and Cameo, both of which went on to become unicorns. In other cases, they offered terms that, if accepted, would likely have made follow-on funding difficult.

That doesn't mean every GenAI deal today is wise. But pointing to Shark Tank as a benchmark for rational investing is a very selective filter. Historically, it’s missed more home runs than it’s hit.

You would have been a fool to invest in apple in the late 90s on any other signal than the return of Steve Jobs. That era created many rich fools.

It is a bubble, of course, but this person would get $100m round in a non-bubble.

Same thing here. Mira is a top tier, high-profile person in the AI space. So investors lined up.

People have been saying this for the better part of 10 years

This is why the Us is pro Israel as well. They are a good customer to the military industrial complex.

Now if we could only get japan, ASEAN, S.Korea into a conflict w China over taiwan we could ramp up this model - but we’ll need to build drone factories to usurp the the cheap turkish, polish, ukrainian, and russian suppliers.

And the additional bonus is that all this has to be transacted in dollars giving our currency preeminence so we can print more of them and not suffer inflation- even tho there are more dollars chasing the same goods- its happening symmetrically around the world because everyone has to use them.

Looking at the valuation I don't get how they would not be round-tripping and otherwise cooking the books a lot right now (not necesarily limited to this case, but more in general).

Very strong Y2K bubble vibes.

I don't know that it'll work, but it is worth trying.

I think it lies at the intersection of a lot of topics where HN comments are hostile: VCs, large fundraising, AI, OpenAI related employees. These are all topics where HN comments are more hostile than pragmatic.

Most of the hostility is just a proxy for “VCs bad” banter.

(Sure -- that background is somewhat self earned.)

(They could have just as well picked Skynet.)

you imply that VCs are rational because bet their own money, which in current complicated world probably is not true. VC funds get money from complicated funnel likely including my/your retirement account and country public debt, VC managers likely receive bonuses for closed deals and not long term gains which may materialize in 10 years. So, investing 2B into non-existing product with unclear market fit/team/tech moat smells very strongly.

> significant OpenAI talent on board, including Murati herself.

because ppl on this website don't consider her a 'talent'.

"Presumably" they have "some" idea. Oh really? Are you "sure" about that? Is that a $12B type confidence?

1. Researchers

2. Productivity-enhancing things in the org (either technical stuff like frameworks/optimisations or nebulous social things like better collaboration)

3. Amount of available compute.

4. Luck

And then the past experience with openAI should help a lot with doing a good job of #1 and #2 even if it is just being a competent executive.

Maybe the product she’s pitched has massive commercial potential.

> Feels almost like cargo-culting.

Why almost?

While these are not necessarily typical cases, they show that it's absolutely possible to have gigantic valuations raised from industry experts with nothing to show for it, if you're good enough at lying.

I don't disagree with your broader point, but have spent enough time with enough a16z partners to say they're just people. Not outright stupid, but not extremely smart, either. And their error rate is pretty high.

Which...to some extent is by design. It's part of a VC's job to make bad bets. Sometimes the price of getting into a deal at all is getting in on insane terms, but you still do it because that one investment could return the entire fund. Maybe Thinking Machines is a winner, maybe it's another Clubhouse. We'll see.

It’s that culture that creates some spectacular hits, and a vast number of misses. Not necessarily a bad thing, but it’s a different approach and means that the funding doesn’t necessarily suggest the results one might expect.

This assumes that being careless with billions can only ever be crazy.

If you're already set for life, why not gamble (including at completely irrational levels) for even more insane amounts of money when the whole thing is just a crazy house of mirrors. Yes, there's value at the heart, but there's also crazy amounts of money being funneled in, lots of opportunity for chaos, lots of chances for legal rug pulls. All of it inflated even further by a fervor of carelessness for any kind of consequences - things like the stock market are completely removed from any kind of fundamentals.

In a fun house of mirrors, that 2 billion could be 2 cents, or it could be 2 trillion. Buy the ticket and have fun!

They don’t need to show a product. It’s been demonstrated that with capital and some skill you can train a foundation model. A16Z has the former. Murati has the latter.

What kind of temerity and hubris would it take to believe that the ratings agencies were colluding with the banks to give AAA to Mortgage Backer Securities?

Yeah, similar to Trump administration may have had some misses but extremely smart people are doing great things.

Can it simply be that anyone who wants to create new competitive models at this point needs billions for training? This isn't a saas where you can whip up a prototype in a month. Rather than having a product to show, I'd guess it's more about an experienced team and some plausible-sounding research ideas.

SBF said if he had a die and it had a 99% chance of killing everyone and a 1% chance of making the world 1 million times happier he would roll the die. Repeatedly. And Silicon Valley loved him.

I think AI is a similar calculation. Humans are tearing themselves apart and the only thing worth betting on is AI that can improve itself, self replicate and end scarcity. I believe that these VCs believe that AI is the only chance to save humanity.

And if you believe that, the net present value of AGI is basically infinite.

If only I had had that idea, maybe I could have raised $2B.

> "We're excited that in the next couple months we will be able to share our first product, which will include a significant open source component and be useful for researchers and startups developing custom model," CEO Murati said in a post on the X social media platform.

From what I’ve read, Murati was an excellent CTO.

They haven’t built anything yet. It’s a bit premature to call out the non-existing product as insufficiently novel.

That said, what was left of the old one was bought by Sun, which is now owned by Oracle.

I wonder if they still own rights to the name? Not the wisest move to name your new company after something owned by the most famously litigious tech corporation.