Chai Discovery's AI Drug Development Rise: From OpenAI Ties to Eli Lilly Partnership

Drug discovery, the process of identifying new molecules for pharmaceutical development, is famously slow and challenging. Traditional methods such as high-throughput screening are costly and often yield limited success. A new wave of biotech firms is now using AI and advanced data technologies to make the process faster and more efficient.

Chai Discovery, an AI startup launched in 2024, is a prime example. In just over a year, its young founders have secured hundreds of millions in funding and gained support from some of Silicon Valley's top investors, positioning the company as a standout in a rapidly growing sector. In December, the firm closed a $130 million Series B round, reaching a valuation of $1.3 billion.

Last Friday, Chai announced a partnership with Eli Lilly, in which the pharmaceutical leader will use the startup’s software to aid in developing new treatments. Chai’s algorithm, known as Chai-2, is built to design antibodies—key proteins that combat disease. The company aims to serve as a "computer-aided design suite" for molecular development.

This is a pivotal time for Chai’s niche. The startup’s deal was revealed just before Eli Lilly announced a separate $1 billion collaboration with Nvidia to establish an AI drug discovery lab in San Francisco. Dubbed a "co-innovation lab," the facility will merge big data, computational power, and scientific know-how to speed up the creation of new medicines.

Still, the industry faces skepticism. Some seasoned professionals argue that, given the inherent difficulty of drug development, these new technologies may not deliver significant breakthroughs. Yet for every critic, there appears to be an equal number of supporters.

Elena Viboch, a managing director at General Catalyst—one of Chai’s key investors—told TechCrunch that her firm is confident partners using Chai’s services will see tangible outcomes. "We believe biopharma companies that quickly align with innovators like Chai will be first to advance molecules into clinical trials and create meaningful therapies," Viboch stated. "In practical terms, that means forming partnerships in 2026 and seeing breakthrough medicines enter clinical testing by late 2027."

Aliza Apple, head of Lilly’s TuneLab program—which applies AI and machine learning to advance drug discovery—also voiced strong belief in Chai’s platform. "By integrating Chai’s generative design models with Lilly’s deep expertise in biologics and proprietary data, we aim to expand how AI can design improved molecules from the start, accelerating the delivery of innovative treatments to patients," she explained.

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Although Chai was officially founded less than two years ago, its origins trace back roughly six years to discussions between its co-founders and OpenAI CEO Sam Altman. One founder, Josh Meier, previously worked on OpenAI’s research and engineering team in 2018. After he left, Altman reached out to Meier’s college friend, Jack Dent, to explore a potential business venture. Meier and Dent had met in computer science classes at Harvard, and at the time, Dent was an engineer at Stripe—another company Altman backed early. Altman asked whether Meier might be interested in collaborating on a proteomics startup focused on protein research.

Altman "messaged me to say everyone at OpenAI thought highly of Josh and asked if I believed he’d be open to working on a proteomics spinout," Dent recalled. Dent responded positively, but there was one issue: Meier felt the underlying technology wasn’t mature enough. The AI tools needed for such ventures were still evolving and not yet ready for prime time.

Meier was also determined to join Facebook’s research and engineering team, which he did. At Facebook, he contributed to ESM1, the first transformer-based protein language model—an important foundation for Chai’s current work. After his time at Facebook, Meier spent three years at Absci, another AI-driven biotech firm focused on drug creation.

By 2024, Meier and Dent felt ready to pursue the proteomics company they had initially discussed with Altman. "Josh and I reconnected with Sam and suggested we resume that earlier conversation—and told him we were starting Chai together," Dent said.

OpenAI became one of Chai’s first seed investors. Meier and Dent, along with co-founders Matthew McPartlon and Jacques Boitreaud, actually founded Chai while working out of the AI giant’s offices in San Francisco’s Mission District. "They generously provided us with office space," Dent shared.

Now, just over a year later, as Chai celebrates its new partnership with Eli Lilly, Dent attributes the company’s rapid growth to bringing together an exceptionally talented team. "We focused intensely on expanding the capabilities of these models," Dent explained. "Every line of code in our system is developed in-house. We’re not simply fine-tuning existing open-source LLMs. Our architectures are highly customized."

General Catalyst’s Viboch told TechCrunch she believes Chai is well-prepared to move quickly. "There are no fundamental obstacles to deploying these models in drug discovery," she noted. "Companies will still need to conduct testing and clinical trials for drug candidates, but we expect early adopters will gain significant advantages—not only in shortening discovery timelines but also in unlocking types of medicines that have been historically hard to develop."