Alphabet's Isomorphic Labs Is in Talks to Raise at a $40 Billion Floor, Five Months After a $2.1 Billion Series B

Isomorphic Labs, the AI drug discovery company Alphabet spun out of Google DeepMind in 2021, is in early-stage talks to raise new funding at a valuation of at least $40 billion, Bloomberg reported on October 8, citing people familiar with the effort. One of those people said the round could value the company as high as $50 billion. The financing has not closed and terms could still change; Isomorphic did not respond to a request for comment.

The number would be striking even by 2026 standards. Five months ago, in May 2026, Isomorphic closed a $2.1 billion Series B that included Thrive Capital, Alphabet and the UK Sovereign AI Fund. Founder and CEO Demis Hassabis said at the time that Alphabet provided the bulk of the capital, without disclosing the valuation. That round followed a $600 million Series A led by Thrive in March 2025, bringing disclosed external funding to roughly $2.7 billion since the company was founded.

What investors would be buying is IsoDDE, the Isomorphic Drug Design Engine, a platform built on AlphaFold, DeepMind's protein-structure prediction technology. It is used to screen and design candidate molecules computationally across the early stages of drug discovery, replacing large portions of the wet-lab cycle with simulation. Alphabet remains the majority owner, and the company has opened sites in the United States and Switzerland as part of its expansion.

The commercial validation so far is partnership revenue rather than product revenue. Isomorphic signed deals with Eli Lilly and Novartis in 2024 that carry potential milestone payments of more than $3 billion combined, and it has a further collaboration with Johnson & Johnson. Milestone money only arrives if specified development goals are met, which means the platform's economics are still largely untested at scale.

That is the central caveat: Isomorphic has not released any clinical data and has not dosed a single patient. The company plans to begin first-in-human trials by the end of 2026, and said in July that it was preparing to start testing its AI-designed drugs in humans. Hassabis has repeatedly argued that AI can compress drug development timelines from years to months, but the proof point investors are actually waiting for is 2027 safety and efficacy data, not another platform upgrade.

The round also lands in a market that has repriced AI-for-biology rapidly. OpenAI launched GPT-Rosalind, a frontier reasoning model for biology and drug discovery, in April, and a string of AI-native biotech startups have raised at steadily higher marks through the year. Chinese brokerage analysts have described the competitive frontier as shifting from model benchmarks toward data quality and closed-loop wet-lab validation, which is precisely the phase Isomorphic is entering.

Stripped of the label, the deal structure is a bet on option value. A $40 billion floor for a company with no clinical readouts implies investors are paying for the probability that the first-in-human program lands in 2027 and validates computational drug design as a category, not just a research tool. If those trials slip, the gap between the platform's engineering value and its paper valuation becomes the story.