AI Drug Discovery Startup Chai Raises $130M at $1.3B Valuation, Lands Eli Lilly Deal
Chai Discovery, an AI biotech startup founded by former OpenAI and Facebook researchers, has closed a $130M Series B at a $1.3B valuation and announced a partnership with Eli Lilly. The company builds custom protein-language models to accelerate antibody design, representing a major bet on AI-driven drug development.
AI Drug Discovery Startup Chai Raises $130M at $1.3B Valuation, Lands Eli Lilly Deal
From OpenAI Offices to Big Pharma
Chai Discovery, an AI-driven drug discovery startup founded in 2024, has completed a $130 million Series B round at a $1.3 billion valuation. The company also announced a partnership with pharmaceutical giant Eli Lilly to use its software for developing new medicines.
The deal marks a rapid rise for Chai, which was founded by former OpenAI and Facebook researchers who had been discussing a proteomics startup with OpenAI CEO Sam Altman as far back as six years ago.
The Technology
Chai has developed an algorithm called Chai-2, designed to develop antibodies — the proteins necessary to fight illnesses. The startup positions itself as a "computer-aided design suite" for molecules, using custom-built protein-language models rather than fine-tuning existing large language models.
"Every line of code in our codebase is homegrown," co-founder Jack Dent told TechCrunch. "We are not taking LLMs off the shelf that are in the open source ecosystem and fine-tuning them. These are highly custom architectures."
The Origins
Chai co-founder Josh Meier previously worked at OpenAI in 2018 on its research and engineering team. After leaving, Altman reached out to Meier college friend Jack Dent — then a Stripe engineer — about collaborating on a proteomics startup. However, Meier felt the technology was not quite ready.
Meier went on to join Facebook research, where he helped develop ESM1, the first transformer protein-language model — an important precursor to Chai work. After three years at AI biotech firm Absci, Meier and Dent felt prepared to tackle the proteomics company they had originally discussed with Altman.
"Josh and I reached back out to Sam and told him we should pick up that conversation where we left off — and that we were starting Chai together," Dent said. OpenAI became one of Chai first seed investors, and the founders worked out of OpenAI San Francisco offices while building the company.
The Eli Lilly Partnership
Under the partnership announced in January 2026, Eli Lilly will use Chai software to help develop new medicines. Aliza Apple, head of Lilly TuneLab program, said: "By combining Chai generative design models with Lilly deep biologics expertise and proprietary data, we intend to push the frontier of how AI can design better molecules from the outset."
The deal came shortly before Eli Lilly announced a separate $1 billion partnership with Nvidia to create an AI drug discovery lab in San Francisco.
Investor Confidence
Elena Viboch, managing director at General Catalyst — one of Chai major backers — expressed confidence in the technology: "We believe the biopharma companies that move the most quickly to partner with companies like Chai will be the first to get molecules into the clinic, and will make medicines that matter."
Viboch predicted that by the end of 2027, first-in-class medicines developed using these technologies could enter clinical trials.
Industry Context
Drug discovery is notoriously time-consuming and expensive. Traditional techniques like high-throughput screening offer a scattershot approach that is not often successful. AI-driven approaches promise to accelerate and streamline the process, though the industry has detractors who question whether the technology will have major impact.
Chai rapid funding success — reaching unicorn status in just over 12 months — signals strong investor belief in AI-driven drug discovery despite skepticism from some industry veterans.
Sources
- TechCrunch — "From OpenAI offices to a deal with Eli Lilly — how Chai Discovery became one of the flashiest names in AI drug development" (January 16, 2026) https://techcrunch.com/2026/01/16/from-openais-offices-to-a-deal-with-eli-lilly-how-chai-discovery-became-one-of-the-flashiest-names-in-ai-drug-development/
- TechCrunch — "OpenAI-backed biotech firm Chai Discovery raises $130M Series B at $1.3B valuation" (December 15, 2025) https://techcrunch.com/2025/12/15/openai-backed-biotech-firm-chai-discovery-raises-130m-series-b-at-1-3b-valuation/
- Business Wire — "Chai Discovery Announces Collaboration with Eli Lilly and Company to Accelerate Biologics Discovery" https://www.businesswire.com/news/home/20260108131261/en/