Venture capitalists are questioning the neolab math
Venture capitalists are increasingly skeptical of the high valuations assigned to 'neolabs,' which are research-first AI startups founded by former big-tech talent. Experts warn that these companies face intense competition and may struggle to justify their multibillion-dollar price tags.
Why it matters
The debate highlights a potential cooling of the AI investment bubble and raises questions about the long-term economic viability of capital-intensive AI research firms.
Menlo Ventures' Matt Murphy speaking to Ben Bergman at Tech Insider: Growth Mode. JY Studio A version of this story originally appeared in Business Insider's weekly VC Insider newsletter. Sign up for BI's VC Insider newsletter here. Ben here. Up until recently, it was a great time to be the founder of a neolab, the lavishly funded, research-first AI startups founded by top talent who defected from the likes of OpenAI or Google DeepMind. We reported last month that Jeff Dean, Google's former chief scientist, is seeking a valuation as high as $50 billion for his new AI science startup. OpenAI cofounder Ilya Sutskever's Safe Superintelligence is worth $32 billion. Another OpenAI alum, Mira Murati, is raising a round for Thinking Machines Lab at a valuation of around $40 billion.
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