During a fundamental technology shift like the current AI wave, traditional market size analysis is pointless because new markets and behaviors are being created. Investors should de-emphasize TAM and instead bet on founders who have a clear, convicted vision for how the world will change.

Founders in deep tech and space are moving beyond traditional TAM analysis. They justify high valuations by pitching narratives of creating entirely new markets, like interplanetary humanity or space-based data centers. This shifts the conversation from 'what is the market?' to 'what could the market become?'.

The startup landscape now operates under two different sets of rules. Non-AI companies face intense scrutiny on traditional business fundamentals like profitability. In contrast, AI companies exist in a parallel reality of 'irrational exuberance,' where compelling narratives justify sky-high valuations.

Unlike SaaS, deep tech companies have a unique valuation trajectory: a sharp seed-to-Series A increase, a long plateau during R&D, and then massive step-ups post-production. This requires a bimodal investment strategy focusing on early stage and the final private round before inflection.

Companies like Tesla and Oracle achieve massive valuations not through profits, but by capturing the dominant market story, such as becoming an "AI company." Investors should analyze a company's ability to create and own the next compelling narrative.

The AI boom can sustain itself as long as its narrative remains compelling, regardless of the underlying reality. The incentive for investors is to commit fully to the story, as the potential upside of being right outweighs the cost of being wrong. Profitability is tied to the narrative's durability.

Perception and storytelling are overriding reality as the primary drivers of value. For investors, this means prioritizing companies with compelling, world-changing narratives (like SpaceX or OpenAI) over those that are simply 'fine businesses,' as the discontinuous upside comes from the power of the story.

This provides a simple but powerful framework for venture investing. For companies in markets with demonstrably huge TAMs (e.g., AI coding), valuation is secondary to backing the winner. For markets with a more uncertain or constrained TAM (e.g., vertical SaaS), traditional valuation discipline and entry price matter significantly.

By raising billions for Safe Super Intelligence without any product plans, Ilya Sutskever is employing an extreme version of the "pre-revenue" strategy. This approach avoids scrutiny of business metrics, allowing the company's valuation to be driven entirely by narrative, talent, and the promise of future breakthroughs, mirroring tactics from previous tech bubbles.