Venture capitalists are pouring tens of billions into AI neolabs—startups without products, markets or revenue. In the past two quarters, neolabs raised $24bn, nearly five times what OpenAI and Anthropic combined earned before ChatGPT launched. Month-old Emulate, founded by ex-Google DeepMind researchers, is valued at nearly $4bn.

Safe Superintelligence, Ilya Sutskever’s 2024 venture, raised at a $32bn valuation despite no product. These labs require scarce talent and expensive compute, making fundraising frequent with a median 7.6-month cycle and 3.5x price increases. Reflection AI raised $105mn at $555mn valuation, then $25bn a year later.

Many focus on niche applications like world models or physical AI, and market demand for better, cheaper tools keeps the bet alive. Investors—from VCs to Nvidia, which backs over half the cohort—see real potential in this high-risk, high-reward space.