Neolabs face impossible odds trying to achieve both research breakthroughs and venture-scale business success simultaneously. The article proposes adopting a pharma-style model where specialized research labs focus purely on scientific breakthroughs while larger frontier labs handle commercialization and scaling, reducing pressure on early-stage AI companies.
Over 15 years, major pharmaceutical companies have delivered shareholder returns despite declining R&D productivity and falling returns on capital. Rather than profiting from internal drug development, pharma sustains investor returns through higher valuation multiples, acquisitions, and increased debt-funded dividends and buybacks from existing products.
A analysis of 543 US companies traded by Congress members shows their 2025 federal lobbying spending relative to market capitalization. Tech companies spent a median of $12 per $1M market cap, while defense, telecom, and media sectors spent significantly more at $85, $63, and $63 respectively, with pharma at $55.