Chai Discovery, a San Francisco-based startup backed by OpenAIis the latest drug discovery company to benefit from a wave of investments at the intersection of healthcare and AI. In its latest funding round, the company raised $130 million to accelerate the development of new drugs. The Series B round, announced today (December 15), was co-led by Oak HC/FT and General catalyst. This brings Chai Discovery’s total funding to over $225 million and more than doubles its valuation to $1.3 billion.
Other participants included OpenAI, Prosperous capitalization And Menlo Ventures. Yosemitethe oncology-focused venture capital firm founded by Steve Jobs’ only son, Reed Jobs, also joined the round, alongside Emerson Collectivethe investment company led by Laurene Powell Jobs.
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 AI to transform biology from a descriptive science into an engineering discipline. Chai released its latest model, Chai-2, capable of designing new antibodies to target the disease.
Chai Discovery plans to deploy the new capital to expand its commercialization efforts while accelerating product research and development. “We are impressed by the pace of progress on the models: what seemed like five-year-old problems only a few months ago are now resolved in a matter of weeks,” Meier said in a statement.
Chai Discovery is one of a growing number of drug discovery startups attracting strong interest from Silicon Valley. As excitement grows around the potential of AI in healthcare, prominent technology leaders are quickly backing projects. CEO of OpenAI Sam Altman invested in Formation Bio, while LinkedIn co-founder Reid Hoffmann launched his own drug discovery startup earlier this year, Manas.
Among the best-funded companies in the sector is Isomorphic laboratoriesA Alphabet subsidiary spun off from Google DeepMind in 2021. Led by Demis HassabisCEO of Google DeepMind, the company raised $600 million in March in its first external funding round. The capital aims to realize its ambition to use AI to help cure many diseases around the world.
This optimism has been accompanied by an increase in investment. Venture funding for AI-powered health tech companies, from seed to growth stage, has reached $10.7 billion this yearaccording to Crunchbase data, representing an increase of more than 24% from the $8.6 billion raised in all of 2024.
Meier is confident the spending will pay off. “We stand on the precipice of a new era for the biopharmaceutical industry,” he said, adding that AI models “will unleash a new wave of best-in-class, best-in-class therapeutics, and early adopters in the pharmaceutical sector will be the big winners.”