Chai Secures $70M for AI Drug Discovery, Backed by OpenAI
Fresh off a previous funding round, Chai, an artificial intelligence-driven biotechnology startup, has secured an additional $70 million in investment to accelerate its pioneering work in AI-driven drug discovery. The latest capital infusion, announced on August 6, 2025, sees prominent venture capital firms Menlo Ventures and Yuri Milner’s DST Global Partners joining the ranks of investors backing the OpenAI-supported enterprise. This significant Series B funding round underscores the burgeoning confidence in AI’s transformative potential within the pharmaceutical industry.
Chai, officially known as Chai Discovery, is at the forefront of re-architecting drug discovery through the development of frontier AI foundation models designed to engineer molecules. The company’s mission is to “transform biology from science into engineering”. This ambitious goal is being pursued by a team comprising leading researchers with seminal accomplishments from top AI labs, including OpenAI, Meta FAIR, Stripe, and Google X.
A cornerstone of Chai’s innovative approach is its multi-modal AI foundation model, Chai-1, which was unveiled in September 2024. This open-source model possesses the capability to predict the structure of molecules crucial for drug development, analyzing a wide array of substances such as proteins, small molecules, DNA, and RNA. Chai-1 has demonstrated impressive performance, outperforming comparable models like AlphaFold3 and ESM3 in various benchmarks. Notably, it can work effectively with just a single biological sequence, simplifying usage while maintaining high performance. Its ability to fold multimers more accurately than existing models and excel in predicting protein-ligand interactions further highlights its potential to streamline pharmaceutical research. The company has made Chai-1 freely available, even for commercial applications, with its model weights and inference code released as a software library for non-commercial use, fostering broader research and development within the community.
The latest $70 million investment builds upon an earlier seed round of nearly $30 million in September 2024, which was led by Thrive Capital and saw participation from OpenAI and Dimension Capital, valuing Chai at $150 million at the time. OpenAI’s continued backing of Chai aligns with its broader strategic inroads into the healthcare sector, which includes partnerships to test AI-generated personalized care plans for cancer patients and leading a $70 million funding round for Ambience Healthcare for real-time medical note generation solutions. OpenAI’s language models are increasingly supporting medical research by analyzing vast datasets, with the potential to accelerate drug discovery and personalized care.
Menlo Ventures, a new investor in this round, has a history of supporting innovative entrepreneurs in AI and drug development. The firm actively seeks to invest in generative AI for drug design and has previously backed companies like Vilya, Inc., which focuses on AI-driven development of new classes of medicines, and Recursion and Genesis in small molecule AI drug development. Their investment philosophy centers on identifying and supporting the next wave of AI-native companies, particularly those that can directly address major unmet needs in life sciences and healthcare.
Yuri Milner’s DST Global Partners also joins this funding round. DST Global is a prominent internet investment firm known for backing some of the world’s fastest-growing and most valuable companies, with an estimated $50 billion in assets under management. While primarily focused on late-stage internet companies, their investment in Chai signals a keen interest in the intersection of AI and biotechnology, aligning with their track record of identifying transformative technologies.
The landscape of AI in drug discovery is experiencing rapid growth, with the global market size projected to reach over $10 billion by 2033, growing at a significant compound annual growth rate. This surge is driven by the urgent need to reduce the time and cost associated with traditional drug development, the increasing adoption of AI technologies in healthcare, and the exponential growth of biomedical data. AI’s capabilities span various stages of drug discovery, from target identification and candidate screening to drug optimization and repurposing, dramatically shortening R&D timelines and improving efficiency. However, challenges such as data accessibility and quality, ethical considerations, and regulatory hurdles persist, requiring concerted efforts in strategic planning and resource allocation.
Chai’s latest funding round positions it strongly within this competitive and rapidly evolving field. By leveraging cutting-edge AI models like Chai-1, the company aims to not only accelerate the discovery of new therapeutic compounds but also enhance the understanding of complex biological interactions, ultimately contributing to a more efficient and impactful future for medicine.