Published: October 8, 2026 · Last updated: October 8, 2026
TL;DR: Bloomberg reports that Isomorphic Labs, the AI drug discovery company Alphabet spun out of Google DeepMind, is in early talks to raise new funding at a valuation of at least $40 billion, barely five months after its last round, even though the company still hasn’t gotten a drug of its own design into human clinical trials.
Bloomberg reported Thursday that Isomorphic Labs is in early discussions to raise a new round of funding that would value the company at $40 billion or more, citing people familiar with the talks. A couple of outlets following the story have floated a range as high as $50 billion. Nothing is settled yet. No investor group has been locked in, and the final size of the round could still move either direction before anyone signs anything.
Isomorphic Labs is the AI drug discovery company Alphabet spun out of Google DeepMind in 2021, built and still led by Demis Hassabis, the same person running DeepMind itself and the one who picked up a Nobel Prize for AlphaFold’s protein structure work. The pitch is straightforward on paper: take what AlphaFold learned about predicting how proteins fold and use it to design drug candidates computationally, instead of grinding through years of trial-and-error wet-lab screening the way the pharmaceutical industry always has.
If this round closes anywhere near the reported number, it would be Isomorphic’s third major raise in under two years, and by far its biggest jump. The company pulled in roughly $600 million in early 2025, then landed a $2.1 billion round in May of this year that brought outside investors into the cap table beyond Alphabet for the first time. Going from that round to a $40 billion-plus valuation in about five months would rank among the sharpest valuation climbs anywhere in AI this year, biotech included.
Here’s the part that should give anyone pause before writing a check: Isomorphic still hasn’t put a drug of its own design into a human clinical trial. Back in January 2024, it signed collaboration deals with Eli Lilly and Novartis worth up to roughly $3 billion combined in potential milestone payments, aimed at finding drug candidates against undisclosed disease targets. That’s real pharma money behind the technology, but milestone deals like that can take years to produce anything resembling a drug, let alone an approved one. When Isomorphic closed its May raise, outlets covering the deal pointed out the company has disclosed almost nothing publicly about which diseases its models are actually working on or what, if anything, has come out the other end.
That gap matters because it’s becoming the defining pattern of this entire funding cycle. Labs that can point to one real scientific achievement keep getting valued on the assumption that the next ten achievements are already baked in. AlphaFold earned its reputation honestly. It solved a problem structural biologists had chased for decades, and it did so fast enough to reshape how the field works. But predicting a protein’s shape and getting a safe, effective drug through years of clinical trials and FDA review are not the same problem, and the second one has humbled better-funded drug companies than this one for a century. Isomorphic’s investors are betting that gap is smaller than the industry’s own history suggests, and they’re betting tens of billions on it before there’s a single clinical data point to check their math against.
If the round lands anywhere close to $40 billion, Isomorphic would be worth more than most public biotech companies that already have approved drugs generating real revenue, built entirely on model output, partnership money, and Hassabis’s name. Maybe that’s investors correctly pricing in a breakthrough that’s closer than it looks from the outside. Or maybe it’s a sign the AI valuation bubble has found its way into an industry that used to demand actual trial data before anyone got excited.
Related: DeepSeek’s own $12 billion funding chase ahead of a 2027 IPO and Google and Meta’s $1.8 billion bet on AI biology through Chan Zuckerberg Biohub.
Bottom Line: A $40 billion valuation for a company with zero drugs in human trials isn’t proof the technology doesn’t work. It’s proof that AI funding math has stopped waiting for proof of anything. Watch what Isomorphic actually puts into a clinic next, not what it gets valued at this month.
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