Ilya Stuskever, another OpenAI refugee, also reeled in $2 billion for his company, Safe Superintelligence \u2014 but at a, checks notes, $32 billion valuation! It has yet to trouble the world with a product.<\/p>\n
History does not repeat itself, as the trope goes, but it rhymes. Which is why the madness to which I have returned takes me back to December 1999. I had just graduated with a liberal arts degree and a surfeit of energetic naivety. <\/p>\n
The internet boom was in full bloom and so I hatched a cunning, three-stage scheme: move to San Francisco, get a job at a dotcom (any dotcom would do), and then watch my share options explode in value, turning me into a millionaire by the age of 25.<\/p>\n
You\u2019ll be surprised to learn that my watertight plan sprung a few leaks. I did move to San Francisco, and I did land a job at a buzzy dotcom that was so desperate for warm bodies, it looked past the rather underwhelming skills implied by my degree in international relations and Spanish. I lasted four months.<\/p>\n
The dotcom bubble burst, my employer quickly realised it had no chance of ever raising money again, and deemed me \u2014 and much of the company \u2014 surplus to requirements. It went under not long after, amid thousands of others.<\/p>\n
![\"Ilya](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/07\/\/9c881cc2-13f6-49d1-b067-161a69c3f767.jpg\")
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Ilya Sutskever\u2019s Safe Superintelligence has yet to release a product but it raised $2 billion at a $32 billion valuation<\/p>\n
AFPK GUEZ\/AFP<\/p>\n
The experience was, in retrospect, a fabulous internship for the business reporter I would become. Seasoned business leaders, top bankers, the world\u2019s savviest investors \u2026 they had all drunk the Kool-Aid. Otherwise intelligent and canny operators had been swept up in a type of group hysteria, fuelled by a powerful cocktail of optimism, magical thinking and greed. Who needs profits when we are about to change the world?<\/p>\n
Sound familiar?<\/p>\n
So is this time \u201cdifferent\u201d, as anyone with a PowerPoint deck and an AI idea to sell would have you believe? I think two things are true. AI will, indeed, change just about every industry and how we live life, in ways large and small. Yet it is also true that we are caught in the midst of a gigantic bubble that, when it pops, will lead to the disappearance of most AI companies and wipe out trillions of dollars of wealth in private and public markets.<\/p>\n
The latter, after all, is not a big leap. Since the start of 2023 through last month, the \u201cMagnificent 7\u201d tech stocks \u2014 Apple, Microsoft, Alphabet, Meta, Nvidia, Amazon and Tesla \u2014 have gained $9.7 trillion in market value. This bears repeating: that figure is the combined value increase, not the overall sum. Put another way, the rise in value of those seven companies over these past two and a half years is equivalent to recreating the entire listed universe of 2,000 companies on the London Stock Exchange \u2014 twice.<\/p>\n
![\"Andrew](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/07\/\/3b0e2890-96c0-4629-83b8-8321c0d4a38d.jpg\")
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\u201cThe market\u2019s hot. It\u2019s not that hot,\u201d said Meta\u2019s Andrew Bosworth of claims that his company was paying $100 million bonuses to poach talented staff<\/p>\n
DAVID PAUL MORRIS\/GETTY IMAGES<\/p>\n
Downstream of those astronomical figures is the bubbling cauldron of Silicon Valley start-ups, which are taking advantage of the mania to raise eye-watering amounts of money at valuations that most have no hope of earning their way into. Indeed, last year alone, Californian start-ups raised nearly $50 billion across more than 850 financing deals, according to data from PitchBook.<\/p>\n
The upshot is that money is sloshing around to a degree not seen since the internet turned the world upside down. And amid the madness, the biggest beneficiaries are, without question, software nerds.<\/p>\n
What a time to be a coder!<\/p>\n
The top keyboard jockeys are being courted with pay packages to rival Premier League footballers. OpenAI\u2019s Sam Altman made headlines recently when he said Meta\u2019s Mark Zuckerberg was offering $100 million bonuses to lure away his top talent. Andrew Bosworth, Meta\u2019s chief technology officer, poured cold water on the claim \u2014 sort of. \u201cSam is just being dishonest here,\u201d he reportedly told an internal meeting. \u201cHe\u2019s suggesting that we\u2019re doing this for every single person \u2026 Look, you guys, the market\u2019s hot. It\u2019s not that hot.\u201d<\/p>\n
So, not every single person, but some?<\/p>\n
![\"a](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/07\/\/methode\/times\/prod\/web\/bin\/4bcdcd83-1187-4b2f-ad15-d6c58e027329.jpg\")
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Alexandr Wang\u2019s Scale AI was acquired for $14.3 billion by Meta, which is also said to have offered $200 million in pay to Apple\u2019s Ruoming Pang, below<\/p>\n
DAVID PAUL MORRIS\/GETTY IMAGES<\/p>\n
![\"Ruoming](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/07\/\/62462783-1f29-48ef-8d4a-ab2ee3621a4e.jpg\")
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Indeed, just look at what Meta has done in the past month. It paid $14.3 billion for 49 per cent of Scale AI, effectively \u201cacqu-hiring\u201d the engineers at a start-up that labels training data for AI model developers. <\/p>\n
Under the deal, 28-year-old founder Alexandr Wang joined Meta\u2019s \u201cSuperIntelligence Labs\u201d. Zuck\u2019s bags of cash have lured a handful of senior OpenAI coders to the new unit. He also poached Daniel Gross, the 34-year-old chief executive of SSI, Sutskever\u2019s start-up, as well as Nat Friedman, the 47-year-old former chief of Github. Gross and Friedman ran an investment fund together, and it is understood that Meta bought out their stake for about $1 billion to bring them into the fold. <\/p>\n
Just days after Bosworth\u2019s luke-warm denial, reports emerged of an even richer deal. Ruoming Pang, Apple\u2019s former head of AI models, was said to have joined after Zuckerberg offered him a multi-year deal worth $200 million. <\/p>\n
One can understand why so many engineers are happily taking Zuck\u2019s money. The Silicon Valley machine is, by design, messy and unpredictable. OpenAI, for example, has jumped from a $1 billion valuation in 2019 to $300 billion today. <\/p>\n
Anthropic, maker of the Claude chatbot, was founded just four years ago and has already seen its valuation soar to $60 billion. Sales, meanwhile, are on track to top $4 billion over the 12 months \u2014 from a standing start in 2022. OpenAI has forecast $13 billion in revenue for 2025, all from a suite of products that did not exist three years ago. <\/p>\n
The mind boggles. And yet, soaring growth today does not guarantee success tomorrow. Remember when Yahoo was the master of all it surveyed? Remember when MySpace dominated social media? For every ten companies that get venture capital backing, roughly five will die, four will limp on, merge or get bought for a modest sum, and one, if its investors are lucky, will turn into a properly successful company. Perhaps it becomes a unicorn \u2013 until it is disrupted by the next white-hit startup. The sands are always shifting, so when offered life-changing, generational wealth, many are taking it. <\/p>\n
And yes, Zuck has spent $15bn-plus in a matter of weeks for a battalion of sun-starved coders, but old hands see his moves as utterly logical. <\/p>\n
Because if indeed AI is the generational technology that Silicon Valley believes it is, those who grab control of it stand to make hundreds of billions, even trillions, as it replaces humans and takes over more and more of the economically valuable work.<\/p>\n
Reid Hoffman, the billionaire LinkedIn founder and early Meta investor, said last week: \u201cThe talent race, to your average American, looks crazy \u2014 the amount of money you\u2019re paying individuals in order to do this.\u201d But he added: \u201cIf you invent the thing that essentially \u2014 for example, my own start-up, Manas AI, is trying to cure cancer \u2014 transforms industries, and if you think this individual is the one to do it, then it begins to get more economically rational.\u201d<\/p>\n
![\"Portrait](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/07\/\/methode\/times\/prod\/web\/bin\/e800aa82-4d44-4916-b071-d8f81c6c059e.jpg\")
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