Drug discovery, the art of identifying new molecules for drug development, is a notoriously time-consuming and difficult process. Traditional techniques such as high performance controlthey offer an accurate dispersion approach — one that is not often successful. But a new crop of biotech companies are leveraging artificial intelligence and advanced data technologies in an effort to speed up and streamline the process.
Chai Discovery, an artificial intelligence startup founded in 2024, is one such company. In just over 12 months, its young co-founders managed to raise hundreds of millions of dollars and garner the backing of some of Silicon Valley’s most influential investors, making it one of the most impressive companies in a growing industry. In December, the company completed its Series B, bringing in an additional $130 million and a $1.3 billion valuation.
Last Friday, Chai also announced a partnership with Eli Lilly, a agreement in which the pharmaceutical giant will use the startup’s software to help develop new drugs. Chai’s algorithm, called Chai-2, is designed to develop antibodies — the proteins necessary to fight disease. The startup said it hopes to serve as a kind of “computer-aided design suite” for molecules.
It’s a critical moment for Chai’s particular sector. The startup’s deal was announced shortly before Eli Lilly said it would also partner with Nvidia in a $1 billion partnership to establish an AI drug discovery lab in San Francisco. This “co-innovation lab,” as it’s called, will combine big data, computing resources and scientific expertise, all in an effort to accelerate the speed of new medicine development.
The industry is not without his critics. Some industry veterans seem to believe that — given how difficult traditional drug development is — these new technologies are unlikely to have a significant impact. However, for every naysayer, there seem to be just as many believers.
Elena Viboch, CEO of General Catalyst — one of the The main proponents of Chai — told TechCrunch that her company is confident companies that adopt the startup’s services will see results. “We believe the biopharma companies that move fastest to partner with companies like Chai will be the first to bring molecules to the clinic and make medicines that matter,” Viboch said. “In practice, this means working together in 2026 and by the end of 2027 seeing first-in-class drugs entering clinical trials.”
Aliza Apple, the head of Lilly’s TuneLab program — which uses artificial intelligence and machine learning to advance drug discovery — also expressed confidence in Chai’s product. “By combining Chai’s genetic design models with Lilly’s deep expertise in biological and proprietary data, we intend to push the boundaries of how AI can design better molecules from scratch, with the ultimate goal of helping accelerate the development of innovative medicines for patients,” he said.
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Chai may have been founded less than two years ago, but the startup’s origins began about six years ago amid discussions between its co-founders and OpenAI CEO Sam Altman. One of these founders, Josh Meier, previously worked for OpenAI in 2018 in its research and engineering team. After leaving the company, Altman texted Meyer’s old college friend, Jack Dent, to inquire about a possible business opportunity. Meier and Dent had originally met in computer science classes at Harvard, but, at the time, Dent was an engineer at Stripe (another company Altman was an early backer of). Altman asked him if he thought Meier would be open to working with a proteomics startup — that is, a company focused on the study of proteins.
Altman “messaged me to say that everyone at OpenAI appreciated him and asked if I thought he’d be open to working with them on a proteomic spinout,” Dent said. Dent told Altman “of course,” but there was just one problem: Meier didn’t feel the technology was “there” yet. The artificial intelligence technology behind such companies – which leverage powerful algorithms – was still a developing field and far from where it needed to be.
Meier was also pretty dead when he joined Facebook’s research and engineering team, which he would go on to do. At Facebook, Meier helped develop ESM1the first transformer protein-language model — an important precursor to the work Chai is currently doing. After Meier’s time at Facebook, he would spend three years at Absci, another AI biotech company focused on drug creation.
By 2024, Meier and Dent finally felt ready to tackle the protein company they had originally discussed with Altman. “Josh and I turned to Sam and told him that we needed to pick up the conversation where we left off – and that we were starting Chai together,” Dent said.
OpenAI ended up becoming one of Chai’s early investors. Meier and Dent founded Chai — along with co-founders Matthew McPartlon and Jacques Boitreaud — while working at the AI giant’s offices in San Francisco’s Mission neighborhood. “They were kind enough to give us office space,” Dent revealed.
Now, a little more than a year later, as Chai basks in the glow of her new partnership with Eli Lilly, Dent says the key to the company’s rapid growth has been assembling a team of extremely talented people. “We really just put our heads down and pushed the limits of what these models are capable of,” Dent said. “Every line of code in our code base is native. We don’t take LLMs off the shelf that are in open source [ecosystem] and perfecting them. These are very custom architectures.”
General Catalyst’s Viboch told TechCrunch that she felt like Chai was about to hit the ground running. “There are no fundamental barriers to developing these models in drug discovery,” he said. “Companies will still need to take drug candidates through trials and clinical trials, but we believe there will be significant advantages for those who adopt these technologies — not only in compressing discovery timelines, but also in unlocking classes of drugs that have historically been difficult to develop.”
