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

Drug discovery, the art of identifying new molecules to develop pharmaceutical products, is a notoriously time-consuming and difficult process. Traditional techniques, such as high throughput screeningoffer an expensive, individual approach – an approach that is not often successful. However, a new breed of biotech companies are using AI and advanced data technologies in an effort to speed up and streamline the process.

Chai Discovery, an AI startup founded in 2024, is one such company. In just over twelve months, the young co-founders have managed to raise hundreds of millions of dollars and gain the backing of some of Silicon Valley’s most influential investors, making it one of the most notable companies in a growing sector. In December, the company completed its Series B, which raised another $130 million and gave it a valuation of $1.3 billion.

Last Friday, Chai also announced a collaboration with Eli Lilly, a agreement in which the pharmaceutical giant will use the startup’s software to help develop new medicines. Chai’s algorithm, called Chai-2, is designed to develop antibodies – the proteins needed to fight disease. The startup has said it hopes to serve as a kind of “computer-aided design package” for molecules.

It’s a pivotal moment for Chai’s particular field. The startup’s deal was announced shortly before Eli Lilly said it would also partner with Nvidia on a $1 billion partnership to establish an AI drug discovery lab in San Francisco. This “co-innovation lab,” as it is being called, will combine big data, computing resources and scientific expertise, all in an effort to accelerate the speed of new drug development.

The industry does not without his opponents. Some industry veterans seem to feel that, given how difficult traditional drug development is, these new technologies This is unlikely to have a major impact. But for every naysayer, there seem to be just as many believers.

Elena Viboch, Managing Director at General Catalyst – one of Chai’s main backers – told TechCrunch that her company is confident that companies that adopt the startup’s services will see results. “We believe that the biopharmaceutical companies that move quickly to collaborate with companies like Chai will be the first to get molecules into the clinic and make medicines that matter,” Viboch said. “In practice, this means working together in 2026 and seeing first-in-class drugs enter clinical trials by the end of 2027.”

Aliza Apple, head of Lilly’s TuneLab program – which uses AI and machine learning to advance drug discovery – also expressed confidence in Chai’s product. “By combining Chai’s generative design models with Lilly’s deep biological expertise and proprietary data, we aim to push the boundaries of how AI can design better molecules from the start, with the ultimate goal of helping accelerate the development of innovative medicines for patients,” she said.

Chai may have been founded less than two years ago, but the startup’s origins began about six years ago, amid conversations between its cofounders and OpenAI CEO Sam Altman. One of those founders, Josh Meier, previously worked for OpenAI in 2018 on the research and engineering team. After leaving the company, Altman messaged Meier’s old college friend, Jack Dent, to ask about a possible business opportunity. Meier and Dent had originally met in computer science classes at Harvard, but Dent was a Stripe engineer at the time (another company Altman was an early backer of). Altman asked him if he thought Meier would be open to collaborating on a proteomics startup, a company focused on the study of proteins.

Altman “messaged me to say that everyone at OpenAI thought highly of him and asked if I thought he would be open to working with them on a proteomics spinout,” Dent said. Dent said “of course” to Altman, but there was just one problem: Meier didn’t feel like the technology was there yet. The AI ​​technology behind such companies – which use powerful algorithms – was still a growing field and nowhere near where it needed to be.

Meier was also determined to join Facebook’s research and engineering team, and that’s what he would continue to do. At Facebook, Meier helped with the development ESM1the first transforming 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 making drugs.

By 2024, Meier and Dent finally felt ready to tackle the proteomics business they had originally discussed with Altman. “Josh and I contacted Sam again and told him we should pick up that conversation where we left off – and start Chai together,” Dent said.

OpenAI eventually became one of Chai’s first seed investors. Meier and Dent actually founded Chai — along with their co-founders, Matthew McPartlon and Jacques Boitreaud — while working out of the AI ​​giant’s offices in San Francisco’s Mission neighborhood. “They were kind enough to give us some office space,” Dent revealed.

Now, just over a year later, as Chai enjoys the new partnership with Eli Lilly, Dent says the key to the company’s rapid growth has been assembling a team of immensely talented people. “We really just put our heads down and pushed the boundaries of what these models are capable of,” Dent said. “Every line of code in our codebase is homegrown. We don’t pull LLMs off the shelf that are in the open source [ecosystem] and refine them. These are very customized architectures.”

General Catalyst’s Viboch told TechCrunch she felt Chai was ready to hit the ground running. “There are no fundamental barriers to using these models in drug discovery,” she said. “Companies will still need to test drug candidates and undergo clinical trials, but we believe there will be significant benefits for those who adopt these technologies – not only in shortening discovery timelines, but also in unlocking classes of drugs that have historically been difficult to develop.”