Alphabet's AI-powered drug discovery company, Isomorphic Labs, is in talks for funding, with a valuation of at least $40 billion.

Alphabet's AI-driven drug discovery company, Isomorphic Labs, is seeking a new round of funding with a valuation of at least $40 billion , just five months after its last funding round.

According to a Bloomberg report on October 8, sources familiar with the matter said that the funding negotiations are still in the early stages, with a valuation range potentially as high as $50 billion . The sources indicated that the funding round is not yet complete and details are still subject to change. Isomorphic Labs did not respond to requests for comment.

If the financing is successfully completed, it will mark a significant leap in Isomorphic Labs' valuation in just a few months, further highlighting the capital market's high enthusiasm for the AI pharmaceutical sector.

This marks another move within five months, indicating a significant acceleration in the pace of fundraising.

Earlier this year, Isomorphic Labs completed a $2.1 billion Series B funding round. Alphabet reportedly provided a "significant portion" of that round. CEO Demis Hassabis declined to disclose Alphabet's stake or the company's valuation during the Series B funding round.

Now, just five months after the completion of its Series B funding round, Isomorphic Labs has launched negotiations for a new round of financing, with a target valuation that is significantly higher than the previous round. The speed of its financing is quite rare in the industry.

With the support of DeepMind's expertise, AlphaFold establishes its core competitiveness.

Isomorphic Labs was spun off from DeepMind in 2021 and is headquartered in London. Its core mission is to deeply apply AI technology to drug discovery, building on DeepMind's groundbreaking protein folding model, AlphaFold.

Demis Hassabis, who previously served as CEO of DeepMind for many years, announced in August that he would become Chairman of DeepMind and Chief Scientist at Alphabet, while retaining his position as CEO of Isomorphic Labs. This arrangement allows him to play a key role in bridging Alphabet's overall AI strategy and the commercialization of Isomorphic Labs.

With collaborations with major pharmaceutical companies underway, and its self-developed pipeline progressing simultaneously.

In terms of commercialization, Isomorphic Labs has established partnerships with several top global pharmaceutical companies, including Eli Lilly & Co. and Novartis AG , with a focus on research and development in the fields of cancer and immune diseases.

The company's business model takes two paths: on the one hand, it provides AI drug development models to pharmaceutical companies, empowering partners' R&D processes; on the other hand, Isomorphic Labs is also actively promoting the internal design and development of drug pipelines, seeking a higher position in the value chain.

AI-driven drug development holds great promise, but its commercialization remains a challenge.

Despite the continued surge in investment, the commercialization of AI-driven drug development still faces real challenges. Currently, very few AI-developed drug projects have progressed to the clinical trial stage, and no AI-developed drugs have truly entered the market.

Isomorphic Labs faces competitive pressure from multiple sources. OpenAI has released a specialized model for life science research this year, and many startups and tech giants are also accelerating their efforts in this field.

Hassabis has publicly stated that its goal is to reduce the new drug development cycle from years to months. If this vision can be realized, it will have a profound impact on the global pharmaceutical industry—but given the current overall progress of the industry, the realization of this goal still needs time to prove itself.

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