Mira Murati’s AI startup Thinking Machines valued at $12B in early-stage funding

If it's actually that easy, why don't you do it? Are you seriously just leaving $5 billion on the table?

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.

(Setting the current example aside...)

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 mean, "I have no revenue and no business model but I was the CTO of one of the most important technical companies of this generation, we put out one of the fastest growing SaaS products of all time in a completely new technical category."- not sure how much more signal you would need than that. I don't really get why anyone would be confused about why they are throwing money at her. It's an extremely large amount of money, but it's not as if she has no track record.

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

Business plan, revenue, people: these are all valid signals to form an investment hypothesis. People often outweighs all others wrt early stage companies.

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.

On the other hand, if for whatever reason some top tier soccer/football/basketball/etc. went to shark tank and said «I want to release my own sportswear brand», they’d probably get their funding. In fact, they’d probably have investors lined up.

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

Whenever I hear someone say this I file them under 'techie with no business sense or appreciation of user value'

Investors are investing just as much in the person/team as what they are building. What they build will change, but having a good team is all the difference.

> If it looks like a bubble and smells like a bubble…

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

No different than investment banks in the US loaning money to ukraine so they can get patriot missiles. This generates two income streams for the US ( interest payments on the debt and money to RTX for the missiles). Trump gets a cut on both of these monies (tax on income).

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.

Yes, though realistically they’d be buying the GPUs regardless of who the investors and this sort of vertical integration isn’t directly illegal

To an extend, sure, but not in the "obvious" way you suggest, because that's very illegal. Any arrangement for Nvidia to obviously and directly fund startups to clearly funnel money back through purchases would quickly attract scrutiny from auditors, regulators, and co-investors.

Sidenote: Nvidia has been caught round-tripping before, way back.

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.

The magnitudes make it s.t. it doesn't really matter, I think.

How do you think VC firms work? There is no "own money". Their entire business is getting rich people, institutional investors, governments, pension funds, endowments etc. to give them money and investing that money in startups, keeping a cut for themselves.

Gives a whole new meaning to the "2 on 12 seed round" !

YC is first and foremost a startup accelerator so it makes sense that entrepreneurship would be part of the discussion that people here are interested in.

You are right! Just like how a certain contingent flags posts that discuss any appalling misuse of technology under the pretext that "oh, it's politics, etc.", you should do the same for these scammy news items: flag + hide.

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

True. People here can be like this. I have not forgotten even the greatest juice maker of all times, Juicero was similarly disparaged with all this negativity.

> Could somebody explain why there is so much negativity towards Thinking Machines in this thread?

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.

It's nothing to do with Thinking Machines as a company, it's to do with a VC that's content to bet two billion dollars on a company that has shown absolutely nothing, and the sorry state of affairs that represents.

The math to justify that investment is crazy.

Because connections and social signalling matter more than ideas among the rich of the world. Only some people can get such disproportionate advantages.

This place used to be a place for hackers and founders. Now it is mostly a place for middle aged software engineers who hate someone else to success, change and hope for the future of Linux desktop. Thinking Machines presents both change and success .

People with no product, no specific insight, and no published plan raising $$ trillions, due to elite background.

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

I think most people aren’t aware that as CTO Murati can take a large chunk of the credit for OpenAI’s success. Her skills were mostly in deft technical management, a skill often under appreciated by nerds. Her success here is going to heavily depend on her ability to attract the right talent.

I suppose one should expect ‘time to agi’ to be a function of:

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.

IIRC, she was the driving force behind ChatGPT - the product, that is. Arguably the most successful AI/LLM product.

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

Sorry: precedes

The ability to attract good researchers is probably more important than being one your self.

> Feels almost like cargo-culting.

Why almost?

Theranos was worth $9B in 2013 money, and it latet turned out that they had literally nothing but hype. Enron was posting $100B revenue the year before it went bankrupt. Bernie Madoff's fund had huge banks as institutional investors. Magic Leap was valued at $4.6B and had some purportedly amazing demos behind closed doors that anyone who witnessed them thought would revolutionize entertainment.

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.

> a crowd of extremely smart people

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.

I do agree for $2bn, but it’s also well known that US and in particular SV VCs will fund ideas and people, I.e. potential, whereas everywhere else funds results.

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.

> they are actually crazy and frittering away 2B on hype

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!

> A16Z has certainly had some misses, but one assumes there actually is some product

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.

Isn’t this the perspective that leads to all bubbles?

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?

> A16Z has certainly had some misses,..

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

Oh it’s going to get exciting indeed!

https://en.wikipedia.org/wiki/Thinking_Machines_Corporation for the reference

Danny Hillis deserves a mention