Thinking Machines Lab is finalizing a $5 billion funding round at a $40 billion pre-money valuation, more than tripling its price tag from a year ago. Accel is leading the investment, according to people familiar with the terms, capping a process that stalled last year when the startup sought $50 billion.
The price jump and the stalled round
The new valuation marks a sharp escalation from the more than $10 billion price tag attached to the company’s $2 billion seed round last year. That seed financing closed before the lab had launched a product, an early signal that investors were pricing the pedigree of the team rather than commercial traction. Talks for a follow-on round at a $50 billion valuation were abandoned last year, leaving the company to execute on its roadmap before returning to market at a lower, though still historic, entry point.
Talent churn behind the headline
The fundraising narrative sits alongside significant attrition at the top of the organization. About a third of the founding team has departed, including Barret Zoph, Luke Metz, and Andrew Tulloch, lured away by compensation packages from rivals such as Meta and OpenAI. The exodus illustrates the circular logic of the current market: the valuations required to fund competitive pay packages are justified by the talent those packages are meant to retain, even as that talent proves mobile.
Product milestone amid the raise
The round closes the same week the company released an updated version of Tinker, its first commercial tool. Tinker is designed to simplify fine-tuning of large language models, and the startup said the new version shows gains in AI coding benchmarks. The timing gives investors a tangible artifact to point to, though the gap between a fine-tuning utility and the general-purpose intelligence the valuation implies remains wide.
Structure and terms
The $5 billion is expected to be primary capital added to the balance sheet. The source did not disclose whether the round includes secondary sales for early employees or investors, nor did it specify any tranche structure, performance milestones, or break-fee provisions. Accel and the company declined to comment on the terms.