> If they have enough cash/free cash flow, they don't have to take money at a lower valuation
Sort of? You're describing either a healthy business, at which point their market value shouldn't be an issue, or management holding the business hostage because they prefer their salary to shareholders having a return.
There isn't a return for shareholders if the valuations are lower. The problem is not management holding the business hostage today, the problem was investing at unsustainable multiples a few years ago.
Now the only options are to either cash out at a lower valuation and not make any money, or wait and hope the business grows to the point where you can get a higher total valuation despite the lower multiple and see a return on your capital.
From my experiences, any output I got from "AI", required already some level of experience/understanding of the tooling or language to get something useful out of it.
She couldn't make a business application and go out and start selling subscriptions, but there are whole categories of tools that can be created that are ultra simple CRUD apps that bring specific value to one person. Code quality and/or understanding how it works is irrelevant for that use case.