The workers still generate a perceived value which is what the investors are investing in even if the company cannot capitalize on that value fully in a given time.

Only because the investors believe that the workers they are paying are generating even more value than they are comfortable exchanging for it.

Adam Smith didn't live in Silicon Valley. That kind of thing didn't happen in his world.

Adam Smith literally hired James Watt, inventor of the eponymous Watt Steam Engine, and created a position for him, at the University of Glasgow. Literally bankrolled the guy who launched the Industrial Revolution.

And ... managed to scarcely mention his invention at all in Wealth of Nations. For a book that's considered to be the foundation of modern economics, he utterly misses the major factor driving growth through the 19th and much of the 20th century: coal-fired steam power. Even today, coal-fired steam (through turbines rather than pistons) drives much electrical generation.

https://en.wikipedia.org/wiki/James_Watt

So? Did James Watt generate more value than he cost?

Kirkcaldy. I grew up there. Not so different from Sunnyvale..

E.g. http://www.xnumber.com/xnumber/microprocessor_history.htm

Just think of them as generating entertainment value.

There is no steady state in which a worker can be paid more than the value he creates. As long as that state continues, value is being destroyed, and whoever is paying the worker will ultimately run out of willingness or, failing that, ability to pay.

Capitalism already fails to exist without leverage and with a fixed supply of money. The equilibrium you speak of is already fiction.