It's nothing to do with Thinking Machines as a company, it's to do with a VC that's content to bet two billion dollars on a company that has shown absolutely nothing, and the sorry state of affairs that represents.
Why does it represent a "sorry state of affairs"?
VCs are risking money they manage, it's not like they're putting anyone else at risk. Do we really prefer a world in which we don't take risks to develop new technology?
The VC sector is probably an order of magnitude smaller then, say, fashion. Isn't money better spent taking risks to develop new technologies that have a chance to legitimately change the world for the better?
Note: If you think the technology could be a negative (which, to some extent I do because of the elements of AI safety, that's a separate argument. Not sure that that's what you're referring to though.)
I do see some value in it, we need to take risks with our capital and on a long term horizon it's fine.
But there has to be some rationale behind it at least, some evidence based approach.
But I imagine there's immense pressure to do so. Returns are tracked relative to others. All distorted by big jumps in valuations. In the long term, there might be a more prudent/sustainable use of some of that capital but we'll never know, everyone's chasing share price go up, not value added / profit go up.
Yes, it's good to have your finger in the pie. But the stake may be overpriced, given current behaviour.
But no risk for them, everyone paid for them to keep their billions.
They're putting everyone at risk.
As others in this thread have pointed out what these VCs do is make wildly risky gambles. When it pays off they make billions of dollars in profit and congratulate themselves for their foresight and the power of capitalism. When it doesn't they go cap-in-hand to the federal government, saying that if they're allowed to collapse it'll destabilize the entire economy.
If it were just some rich billionaires who might have to sell their second private jet when this collapses I'd agree with you: who cares what they do with their own money. But what's going to happen is that the taxpayer will end up footing the bill for their reckless behavior, and millions of people will end up worse off for it as governments cut back on welfare, healthcare, and aid programs to balance the books. In a very real sense, people are going to be paying for VC greed with their lives.
But that's not actually true.
The Silicon Valley Bank situation aside - because it was a unique situation, we can open it if you want - when have VCs asked to be bailed out on failed investments? This kind of moral hazard is absolutely a thing in banks and finance in general, but afaik, not in the VC industry.