The Valuation of Vision: Why Tech Investors Are Betting on Talent Over Product
Thinking Machines Lab just raised $2 billion at a $10 billion valuation. No product. No roadmap. Just talent. Just conviction. And if you’re getting the vibe of mad investor FOMO watching this play out, well, you’re not alone in that thinking. What’s happening here isn’t just about hype. It’s about a shift in how value is assigned in frontier tech. This is the era of talent valuation, and while the math is risky, it isn’t as wild as it looks.
We’re no longer watching investors back a thing. They’re backing the people who might build that thing. The former OpenAI dream team walks into the arena, and investors are handing out blank checks before the game even starts. No one knows the sport. No one’s seen the playbook. But last time, this crew changed the world. Does that mean they will again? No. Does it mean they have a better shot because they’ve done it before? Probably. But again, don’t count your chickens before they hatch.
TL;DR
What’s happening: Thinking Machines Lab raised $2B at a $10B valuation with no product, no roadmap, just a stacked team and serious investor conviction.
Why it matters: This marks a shift in tech investing. We’re in the era of talent valuation where investors are betting on proven operators to build the next world-changing company, not just a product.
The upside: Backing top talent can de-risk execution, attract ecosystems, and in winner-take-most markets like AGI, one big win justifies the bet.
The risk: Valuations are outrunning fundamentals. Betting on talent isn’t a guarantee. At these prices, only an outcome that reshapes tech history makes the math work.
The big question: Are we building the future, or just writing checks to people who once built it?
The New Play: Betting on People, Not Product
Tech investing, especially in AI and frontier fields like AGI, has hit a point where the what is too foggy to evaluate. So investors cling to the who. When no one can see where the map leads, the logic goes: bet on the best navigators. This is the OpenAI effect. When a handful of brilliant operators unlocked a massive market shift once, why not back them again? Especially when mega-funds have mountains of capital to deploy and need seismic returns to move the needle.
Venture investing in these teams is like being a sports GM. You are drafting top talent not for what they’ve already done, but for what their past performance suggests they could do in a new context. This isn’t hero worship. It’s Moneyball. It’s about analyzing prior stats, past wins, capabilities, team dynamics, and betting that the right people can engineer future championships even without a playbook.
A $10 billion valuation on a six-month-old company with no product is really just a multiple on potential. Proven execution plus talent density plus market size, divided by scarcity. It’s not crazy math. It’s risky math. As a16z and other backers see it, this is pre-plan capital, a deliberate choice to fund vision before vision turns into a plan. As one investor put it bluntly as it relates to how they invest in Inc.: Venture dollars are deployed to back people, who in turn build companies. These decisions are made based on human evaluation, asymmetrical information, and an opinionated view of the future. Of course, not everyone is convinced. TCV’s Jay Hoag recently compared this AI funding frenzy to “7-year-olds playing soccer. Everyone chasing the ball, no positions, no structure.” in Business Insider.
The FOMO Factor
This is investor FOMO at its peak. No one wants to miss the next OpenAI moment. No one wants to be the fund that didn’t have a seat at the table when the next $90 billion company took shape. It’s musical chairs before the music even starts and the chairs are invisible. But last time, an invisible chair turned into OpenAI, so elbows are flying. But this is investing.
The Upside of Betting on Talent
There is logic in betting on talent at this scale. Proven operators de-risk execution, or so we hope. Superstar teams attract more talent, capital, partnerships, media, really the entire ecosystem and they build gravity. In AGI and frontier tech, where the rules of the game are still being written, the smart play is to draft the best athletes you can and trust they’ll figure out how to win. And in the world of high-stakes investing, one championship season is often all it takes to make the risk worthwhile.
The Downside
But let’s not ignore the risks. Valuations like this can untether from fundamentals fast, and markets built on hype are fragile. Even top talent isn’t immune to failure. Jordan missed shots. Great bands write bad albums. And founders with super-voting shares and no product can easily lose sight of customers, chasing vision instead of validation. Betting on talent is powerful, but it’s still a bet, not a guarantee.
Echoes of Earlier Tech Investing Eras
This moment isn’t entirely unprecedented. We’ve seen vision-first investing cycles before, but rarely at this scale or speed.
Dot-com boom (late ’90s). Investors threw billions at domain names and PowerPoints, betting that whoever grabbed digital land first would own the future. Plenty of those bets were all sizzle, no steak. It’s like you can hear the fajitas coming out of the kitchen, but when the plate hit the table, nothing was on it. Pets.com, anyone?
Social web (mid-2000s). Capital flowed to founders who seemed to “get” emerging social behaviors, long before the business models caught up. The bet wasn’t on the product. It was on the people who could read the room.
Tesla and SpaceX (early 2010s). The ultimate vision-premium plays. Investors backed the person and the mission, not a polished product. The product came later and in both cases, the risk paid off big.
What’s different this time is the magnitude. The checks are bigger. The timelines are faster. The stakes feel higher. Investors aren’t just betting on vision. They’re betting that vision will unlock the biggest market shift of our lifetime. Here’s the thing about those odds. At these valuations, the math demands an outcome so massive it makes today’s giants look small. A $10 billion seed-stage valuation isn’t a bet on building a great company. It’s a bet on building the company, the one that defines the next era of technology. Anything less, and the math stops working.
What’s Different Now
The scale. The speed. The stakes. We have never seen $10 billion valuations on six-month-old, productless companies. AGI and foundation models create a winner-take-most thesis, so early bets feel essential. The memory of OpenAI’s rise is still fresh, so conviction is stronger than in prior cycles.
Where Do We Go From Here
The big question is whether this is a temporary spike driven by AGI hype cycles or the new normal. Are we building an innovation ecosystem, or just writing love letters and checks to talent? Because at some point, we will need to taste the meal, not just bet on the chef.
Closing Thought
Potential is the hottest commodity in tech right now. Ultimately thrilling, and such a rich, enticing story, but it’s dangerous too. When the music stops and it is time for these teams to ship, let’s hope we find more than just a beautifully funded empty chair.