From the OpenAI office to a deal with Eli Lilly – how Chai Discovery became one of the best names in AI drug development

Drug discovery, the art of identifying new molecules to develop drugs, is a notoriously difficult process. Traditional techniques, such as high-throughput screeningoffers an expensive scattershot approach – one that is not often successful. However, new biotech companies are using AI and advanced data technologies in an effort to speed up and speed up the process.

Chai Discovery, an AI startup founded in 2024, is one such company. In 12 months, the young co-founder has managed to raise hundreds of millions of dollars and gather the support of some of the most influential investors in Silicon Valley, becoming one of the best companies in the emerging industry. In December, the company complete the B seriesbringing in an additional $130 million and a value of $1.3 billion.

Last Friday, Chai also announced a partnership with Eli Lilly, a give a deal where the pharmaceutical giant will use the startup’s software to help develop new drugs. Chai’s algorithm, called Chai-2, is designed to develop antibodies – proteins needed to fight disease. The startup has said it hopes to use it as a “computer-aided design suite” for molecules.

This is a critical time for Chai’s specialty field. The startup deal was announced shortly before Eli Lilly said it would partner with Nvidia in a $1 billion partnership to create an AI drug discovery lab in San Francisco. This “joint innovation lab,” as it’s called, will bring together big data, resources, and scientific expertise, all in an effort to accelerate the development of new drugs.

The industry does not without its detractors. Some industry veterans seem to feel that – given how difficult traditional drug development is – this is a new technology unlikely to have much impact. However, for every naysayer, there are just as many believers.

Elena Viboch, managing director at General Catalyst – one of the Chai’s main supporter – told TechCrunch that his company is confident that companies using the startup’s services will get results. “We believe the fastest moving biopharma companies to partner with companies like Chai will be the first to get molecules into the clinic, and will create important medicines,” Viboch said. “In practice this means that the partnership in 2026 and by the end of 2027 will see first-class drugs entering clinical trials.”

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

Chai may have been founded less than two years ago, but the beginnings of the startup began about six years ago, in the middle of a conversation between the founder and CEO of OpenAI Sam Altman. One of the founders, Josh Meier, previously worked at OpenAI in 2018 in the research and engineering team. After leaving the company, Altman messaged Meier’s old college friend, Jack Dent, asking about potential business opportunities. Meier and Dent originally met in a computer science class at Harvard but, at the time, Dent was an engineer at Stripe (another company Altman was an early backer of). Altman asked if he thought Meier would be open to collaborating on a proteomics startup — that is, a company focused on the study of proteins.

Altman “messaged me to let everyone at OpenAI think highly of him and asked if I thought he would be open to working with him on a proteomics spinout,” Dent said. Dent told Altman “of course,” but there was just one obstacle: Meier didn’t feel like the technology was “there” enough yet. The AI ​​technology behind the company – which uses powerful algorithms – is still a growing field and far from where it needs to be.

Meier is also pretty dead set on joining Facebook’s research and engineering team, which he will soon be doing. At Facebook, Meier helped develop it ESM1the first transformer protein base model—an important precursor to Chai’s current work. After Meier’s time at Facebook, he will spend three years at Absci, another AI biotech company focused on drug creation.

In 2024, Meier and Dent finally felt ready to tackle the proteomics company they had originally discussed with Altman. “Josh and I went back to Sam and told him we should pick up the conversation we left off—and we started Chai together,” Dent says.

OpenAI ended up being one of Chai’s first seed investors. Meier and Dent actually founded Chai — along with co-founders Matthew McPartlon and Jacques Boitreaud — while working at the AI ​​giant’s offices in San Francisco’s Mission neighborhood. “They were kind enough to give me office space,” Dent said.

Now, more than a year later, as Chai enjoys a new partnership with Eli Lilly, Dent says the key to the company’s rapid growth is assembling a highly talented team. “We’re really just putting our heads down and pushing the boundaries of what the model can do,” Dent said. “Every line of code in our code base comes from home. We don’t take LLM off the shelf in the open source (ecosystem) and perfect it. This is a custom architecture.

Catalyst General Viboch told TechCrunch that he feels Chai is ready. “There are no fundamental barriers to deploying these models in drug discovery,” he said. “Companies still need to take drug candidates through testing and clinical trials, but we believe there will be significant advantages for those who use this technology – not only to compress discovery timelines, but also to unlock classes of drugs that have historically been difficult to develop.