Alphabet’s Isomorphic Labs in Funding Talks for at Least $40 Billion Value

Isomorphic Labs, an Alphabet Inc. company using artificial intelligence to discover drugs, is in early talks to raise new funds at a valuation of at least $40 billion, according to people familiar with the matter.

The round could value Isomorphic Labs, which spun out of Google DeepMind, at as much as $50 billion, one of the people said. The financing hasn’t closed and details could change, the people said.

Isomorphic Labs did not respond to a request for comment.

Five months ago, Isomorphic Labs raised $2.1 billion in its series B funding effort. At the time, the company’s Chief Executive Officer Demis Hassabis said Alphabet provided a “large part” of the financing round but declined to comment on the parent company’s stake or his firm’s valuation.

Hassabis, who also co-founded and ran DeepMind, in August announced that he was shifting to a chairman role at DeepMind and becoming Alphabet’s chief scientist, while remaining the head of Isomorphic.

Read More: DeepMind CEO Sees AI Cutting Drug Discovery From Years to Months

London-based Isomorphic Labs was formed in 2021 out of DeepMind with the goal of building upon the lab’s breakthrough AlphaFold protein-folding model. It competes with an array of businesses trying to apply the latest AI advances to medicine. That includes OpenAI, which this year released a model for life sciences research.

While AI developers promise to dramatically reduce the time and cost of developing drugs, few have progressed to clinical trials and none have brought medicine to the market. Hassabis has said his goal is to cut the time it takes to develop new drugs from years to a matter of months .

Isomorphic Labs has announced partnerships with two major pharmaceutical firms, Eli Lilly & Co. and Novartis AG, and shared plans to focus on treating cancer and immune disorders. In addition to working with pharma companies to leverage its AI drug discovery models, Isomorphic Labs is also plans to design and develop drugs in house.

Alphabet has begun to open select non-Google units, called Other Bets, to outside investors. Self-driving company Waymo raised capital at a $126 billion valuation in February.

External investors in Isomorphic Labs include Thrive Capital, an early OpenAI backer, and sovereign wealth funds from Singapore, the United Arab Emirates and the UK.