Five months after closing its largest financing, the artificial-intelligence drug company spun out of Google DeepMind is back in front of investors, this time with a much bigger number attached to its name.
Isomorphic Labs is in early talks to raise new funds at a valuation of at least $40 billion, according to people familiar with the matter. The round could value the company as high as $50 billion, one of the people said. The financing has not closed, and the people cautioned that the terms could still change.
The return is quick by any standard. In May, Isomorphic closed a $2.1 billion Series B led by Thrive Capital, with participation from Alphabet, GV, MGX, Temasek, CapitalG and the United Kingdom’s Sovereign AI Fund. Alphabet supplied a large part of that round, according to Demis Hassabis, the company’s chief executive, who also chairs DeepMind.
That financing came on top of a $600 million round the company raised in March 2025. Between the two, Isomorphic has taken in roughly $2.7 billion from outside investors, and none of it from a drug that has reached the market.
Alphabet has kept the unit close. Hassabis has said Alphabet will remain the company’s largest shareholder, and the parent has absorbed losses that would have sunk a standalone startup. Isomorphic operates less like a venture-backed company burning through a raise than like a research arm of one of the world’s most valuable firms.
The company sits at the center of Alphabet’s bet that machine learning can crack drug discovery. Hassabis, the British computer scientist who co-founded DeepMind and sold it to Google in 2014, set up Isomorphic in 2021 to turn AlphaFold, the protein-structure prediction system DeepMind built, from a research achievement into an industrial tool for designing medicines.
The technology behind the bet carries real scientific weight. In 2024, Hassabis and the DeepMind researcher John Jumper shared the Nobel Prize in Chemistry for AlphaFold, which had by then predicted the structures of nearly all known proteins. A Nobel does not translate directly into a medicine, but it gave Isomorphic a pedigree few rivals can match.
DeepMind’s AlphaFold database, built with the European Bioinformatics Institute, has made the structures of more than 200 million proteins freely available, and that work became the raw material for a wave of AI drug startups. Isomorphic’s edge, its backers argue, is that it controls both the model and the company trying to profit from it.
The pitch to investors is that a model that can predict how a protein folds can also predict how a potential drug will bind to its target, collapsing the trial-and-error that makes drug development take a decade and cost billions. Isomorphic has signed research partnerships with Eli Lilly and Novartis, deals that attach real money to that promise.
Those partnerships give a sense of the economics. The 2024 agreements carry payments tied to clinical progress that could stretch into the billions, though the upfront sums were modest, in the tens of millions. Drug companies are paying for early access to a tool they hope will shorten a process that fails more than nine times out of ten.
Its first clinical trial is expected to begin by the end of this year, a step that would move the company from promising software to an actual drug candidate in humans. That transition is where AI drug companies have stumbled before; designing a molecule in a computer and proving it works in a person are different problems.
The valuation reflects the scarcity of credible players in a crowded field. Investors have poured money into AI drug discovery for years, and most of the companies have little to show for it. Isomorphic, with Alphabet’s balance sheet and DeepMind’s researchers behind it, reads as one of the few with a plausible claim on the technology.
The price also reflects how quickly AI valuations have inflated. A company worth $40 billion before its first clinical readout would be expensive even by the standards of a frothy market. A new round at that level would give outside investors a way to value a unit Alphabet otherwise keeps tucked inside its “Other Bets.”
For Alphabet, the fundraising does more than raise cash. It sets a number that could matter if Isomorphic is ever spun out or taken public, and it brings in partners such as sovereign funds that carry their own strategic weight. A $50 billion top end would put the drug unit in the company of businesses that already sell medicines.
The talks are early, and early talks routinely come to nothing. The people familiar with the matter said the structure is not set and the figure could move before anything is signed. Isomorphic did not respond to a request for comment.
What the market is being asked to price, in effect, is a bet that the next blockbuster drug will be designed by software rather than discovered in a laboratory. Five months ago investors were willing to pay for a version of that story. The company is now testing how much more they will pay.
