The Alphabet-owned drug discovery company would be raising at a valuation that assumes AI can compress the cost of finding medicines, before any of its own drugs has been tested in humans.
Isomorphic Labs is in talks to raise approximately $5 billion in new funding, according to Bloomberg, citing people familiar with the matter. The financing has not closed and the terms could change.
The report follows an earlier Bloomberg story in October that the company was negotiating at a valuation of at least $40 billion, with one person putting the ceiling near $50 billion. The talks are the same; what is new is the reported size of the round.
Isomorphic declined to comment.
A Tenfold Repricing Without Clinical Data
The company raised $2.1 billion in a Series B in May, led by Thrive Capital, without disclosing a valuation. Its external funding now totals about $2.7 billion.
At $40 billion or more, the implied jump in value is roughly tenfold in five months, and the valuation would dwarf every other AI drug discovery startup. Chai Discovery was valued at $3.8 billion in July; Basecamp Research at $800 million in September.
Investors are not paying for revenue. Isomorphic monetises through research partnerships, including deals worth nearly $3 billion with Eli Lilly and Novartis signed in 2024, plus a collaboration with Johnson & Johnson announced in January.
The company's platform, IsoDDE, is designed to automate parts of early drug design, including finding binding pockets on cell surfaces, a step that normally consumes months of specialist work. Isomorphic says the system outperforms AlphaFold on modelling molecular interactions, a claim it published itself.
The Test Is a Clinical Trial, Not a Benchmark
No drug designed with Isomorphic's platform has been dosed in humans. The company has said its first trials are expected around the end of 2026, which makes the next twelve months decisive in a way that a benchmark score is not.
That gap between valuation and evidence is the central question in AI-for-science investing. A compound that fails in a mid-stage trial destroys the same amount of value whether it was designed by a model or by a medicinal chemist.
The bullish case is that the cost and time of early discovery can fall enough to justify the price across a portfolio of programmes rather than a single drug. The bearish case is that this is a platform priced as if it had already produced approvals.
Hassabis, Alphabet and the Strategic Question
Demis Hassabis is chief executive of Isomorphic and chief scientist of Alphabet, having moved from running DeepMind to a chairman role there in August. Alphabet supplied a large part of the previous round.
That relationship cuts both ways. It gives Isomorphic access to compute, talent and research that few startups can match. It also raises the question of how much of the value will accrue to Alphabet rather than to outside investors, and whether a company inside a giant can be priced like an independent one.
For now, the talks illustrate how far capital is willing to reach ahead of evidence in AI. The round has not closed, and the valuation remains a reported number, not a negotiated fact.
Sources: Bloomberg · Bloomberg, October · Dealroom · SiliconANGLE