Thinking Machines nears $5B round at $40B valuation

Thinking Machines Lab, the AI startup founded by former OpenAI chief technology officer Mira Murati, could close a new funding round as soon as this week. It is raising $5 billion at a $40 billion pre-money valuation, with Accel leading, according to Business Insider, which cited multiple people familiar with the matter.businessinsider.com

The valuation would more than triple the one from the company's last public round. That shows investors are still placing large bets on AI labs even as competition for talent gets fiercer, Business Insider reported. A Thinking Machines representative declined to comment, and Accel did not respond to a request for comment.businessinsider.com

From Talks to a Close

The deal follows months of negotiations. On September 3, TechCrunch reported that Accel, an existing backer, was in talks to lead a $1 billion raise at a valuation of at least $40 billion. Later that day, The Information put the round at $5 billion to $6 billion, with Nvidia ↘ 9.26% expected to supply about half. The chipmaker's portion would be about $2.5 billion, according to the Investing.com summary of that report.techcrunch.com+2

The two companies already work together. In March they announced a multiyear partnership under which Thinking Machines will deploy at least 1 gigawatt of Nvidia's Vera Rubin systems, with the first rollout targeted for early 2027, Yahoo Finance reported.finance.yahoo.com

The $40 billion figure is lower than an earlier target. Late last year, the company sought a round at a $50 billion valuation, but those talks were abandoned, according to Business Insider.businessinsider.com

Revenue and Products

Thinking Machines raised a $2 billion seed round last year before it had launched a product. Its first tool, Tinker, makes it easier to fine-tune large language models, Business Insider noted. In July, the company released Inkling, an open-weight model. It earns money by charging usage-based compute fees when customers adapt models on Tinker, and its annual revenue run rate is above $100 million, according to TechCrunch. TechCrunch said that at that revenue level, a $40 billion valuation is an "extraordinarily high revenue multiple."techcrunch.com+1

A Talent Drain

The new funding comes as the lab tries to hold on to its staff. Thinking Machines has lost several founding members to rival companies, including Barret Zoph, Luke Metz and Andrew Tulloch. About a third of the founding team had left by May, partly because of large pay packages from competitors such as Meta ↘ 3.96% and OpenAI, Business Insider reported. The startup has also brought in new talent, including competitive coder Neal Wu.businessinsider.com