Chai Discovery, a San Francisco-based startup backed by OpenAI, is the latest drug discovery company to benefit from a series of investments at the intersection of healthcare and artificial intelligence. In its latest funding round, the company raised $130 million to accelerate the development of new drugs. The Series B funding round announced today (December 15) was co-led by Oak HC/FT and General Catalyst. The acquisition brings Chai Discovery’s total funding to more than $225 million and more than doubles its valuation to $1.3 billion.
Other participants include OpenAI, Thrive Capital and Menlo Ventures. Yosemite, the oncology-focused venture capital firm founded by Steve Jobs’ only son Reed Jobs, and Emerson Collective, the investment firm led by Laurence Powell Jobs, also joined the round.
Founded in 2024, Chai Discovery is led by CEO Josh Meier, a computer scientist who previously worked at Facebook (now Meta) and OpenAI. The company aims to use artificial intelligence to transform biology from a descriptive science to an engineering discipline. Chai has released its latest model, Chai-2, which can engineer novel antibodies against disease.
Chai Discovery plans to use the new funding to expand its commercialization efforts while accelerating research and product development. “We are amazed at how quickly the model is progressing – what seemed like five years ago a few months ago is now being solved in a matter of weeks,” Meyer said in a statement.
Chai Discovery is one of a growing number of drug discovery startups attracting intense interest from Silicon Valley. As enthusiasm builds over the potential of artificial intelligence in healthcare, prominent tech leaders are moving quickly to back businesses. OpenAI CEO Sam Altman invested in Formation Bio, while LinkedIn co-founder Reid Hoffman launched his own drug discovery startup Manas earlier this year.
One of the best-funded companies in the space is Isomorphic Labs, an Alphabet subsidiary spun off from Google DeepMind in 2021. Led by Google DeepMind CEO Demis Hassabis, the company raised $600 million in its first round of external funding in March. The capital aims to advance ambitions to use artificial intelligence to help cure many of the world’s diseases.
This optimism has been matched by a surge in investment. Venture capital investment in AI-powered health tech companies from seed to growth stages has reached $10.7 billion this year, up more than 24% from the $8.6 billion raised in all of 2024, according to Crunchbase.
Meyer believes the spending will pay off. “We are standing on the precipice of a new era in the biopharmaceutical industry,” he said, adding that AI models “will trigger a new wave of first-in-class and best-in-class treatments, and the early adopters in the pharmaceutical industry will be the big winners.”
