OpenAI-backed Chai raises $70M to fast-track AI-driven drug discovery

Chai Discovery raised $70 million in a funding round that values the AI drug discovery start-up at $550 million.

Why it matters: Chai’s new AI model, Chai-2, is able to generate antibody "hits" at a nearly 20% rate compared to the standard 0.1%. The company hopes its AI could slash time and cost in drug discovery, transforming how new treatments are developed.

Backstory:

• Chai was founded two years ago and raised $30M in seed funding from OpenAI, Thrive Capital, and Nitesh Banta in September 2024.

• Chai’s first model, Chai-1, was already outperforming industry leaders like AlphaFold3 and ESM3 and was built in a few months by a team with experience from OpenAI, Meta, Stripe, and Google X.

Zoom in:

• Backers of this new round include Menlo Ventures, DST Global Partners, Yosemite (Steve Jobs’ son’s oncology fund), Thrive Capital, and OpenAI.

• Chai is also adding former Pfizer CSO Mikael Dolsten to its board.

Big picture: Chai is part of a wave of biotech companies using AI to transform how drugs are discovered, competing with giants like Google DeepMind’s Isomorphic Labs. Although AI has helped to identify some promising drug candidates, none have yet been approved, which highlights the long journey from discovery to market.