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Why are investors still backing new labs? VC's continue backing new labs for a simple reason: despite the importance of scale in this market, they believe the opportunity to create new experiences is not exhausted. Even as the known frontier consolidates around a few dominant players, there are still directions of capability that feel fundamentally different from what exists today. If a new capability (memory? multi-modality? EQ? continuous learning?) enables a different-enough experience, the way ChatGPT differed from search, it could generate its own gravity. This belief means investors aren’t only underwriting “better models,” but the possibility of unlocking entirely new behaviors. There is also a secondary dynamic: the extraordinary talent war. At the frontier, talent is both incredibly valuable and, relative to compute at scale, surprisingly cheap. A small team of elite researchers or engineers can hold significant acquihire value to major labs. This can shift the distribution of outcomes and make certain early-stage bets feel more palatable. But it’s a dangerous game. Acquisitiveness will vary with the capital markets and will of the biggest players.