❯ Thinking Machines in talks for $1B at a $40B valuation, below its earlier ask

markdownThinking Machines Lab, founded by Mira Murati, is in talks to raise at least $1 billion at a roughly $40 billion pre-money valuation — below the $50 billion-plus it was seeking last fall. Accel is discussing leading the round and Nvidia is among the investors, per The Information.

against revenueThe company is under two years old with annualized revenue reported in the hundreds of millions. At $40 billion that multiple remains extreme, but the direction changed: for the first time a top-tier model lab is being priced downward rather than doubling each round. For the prior year, nearly every frontier lab round closed at a step-up. Set that against Crusoe’s oversubscribed round at $30 billion the same day — money is rotating from the model layer to the compute layer.

an inflectionHow private investors underwrite model companies has to change. A markdown is not a bearish call, but pricing on “founder halo plus narrative” has stopped working and diligence is falling back to revenue multiples. Several labs of similar scale raise over the coming months; whether their marks go up or down will tell the market whether this is one case or a trend.

▪ SIGNALA top lab failing to get its own asking price says the valuation anchor is migrating from models to the compute underneath them.