From OpenAI’s offices to a deal with Eli Lilly — how Chai Discovery became one of the flashiest names in AI drug development

The journey of drug discovery, a complex process of identifying new molecules for pharmaceuticals, has long been plagued by inefficiencies and high costs. Traditional methods, such as high-throughput screening, often yield minimal success, prompting innovation from a new wave of biotech companies. Among these is Chai Discovery, an AI startup that emerged in 2024, rapidly gaining attention for its groundbreaking approach to drug development. Within just over a year, Chai Discovery's founders have attracted significant investments, amassing hundreds of millions of dollars, with influential Silicon Valley investors backing their vision. Their recent Series B funding round closed in December, raising an impressive $130 million and valuing the company at $1.3 billion. Just last week, Chai announced a strategic partnership with pharmaceutical giant Eli Lilly, which will utilize the startup's proprietary software to aid in the development of new medications. Chai’s innovative algorithm, known as Chai-2, is engineered to create antibodies—proteins vital for combating diseases. The company envisions itself as a “computer-aided design suite” for molecular development. This partnership aligns with a significant moment in the industry, especially as Eli Lilly also revealed plans to collaborate with Nvidia on a $1 billion initiative aimed at establishing an AI drug discovery lab in San Francisco. This co-innovation lab is set to leverage big data, computational power, and scientific insight to expedite the creation of new therapeutics. Despite the excitement surrounding these advancements, the industry faces skepticism from some veterans who question the efficacy of new technologies in such a challenging field. However, proponents remain optimistic. Elena Viboch, managing director at General Catalyst, one of Chai’s major investors, believes that biopharma companies that swiftly adopt Chai's solutions will lead the charge in delivering new treatments. Viboch stated, “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.” Aliza Apple, who heads Lilly’s TuneLab program that employs AI and machine learning for drug discovery, also expressed enthusiasm about Chai’s capabilities. She emphasized that merging Chai’s generative design models with Lilly’s extensive biologics expertise will push the boundaries of AI in molecular design, ultimately aiming to accelerate the development of innovative therapies for patients. Chai's inception traces back to discussions between its founders and OpenAI CEO Sam Altman six years ago. Co-founder Josh Meier previously worked at OpenAI and later at Facebook, where he contributed to the development of ESM1, an influential protein-language model. This experience laid the groundwork for Chai's current endeavors. After years of preparation, Meier and co-founder Jack Dent reconnected with Altman to bring their proteomics vision to life, leading to the establishment of Chai Discovery with a talented team committed to pushing the limits of AI in drug development. As the company enjoys its newfound partnership with Eli Lilly, Dent reflects on their rapid growth, attributing it to the exceptional talent within their team. “Every line of code in our codebase is homegrown,” Dent explained, highlighting their commitment to developing highly customized architectures rather than relying on off-the-shelf solutions. With industry support and a clear vision, Chai Discovery stands poised to transform the landscape of drug development through its innovative AI-driven approach.