Emulate, a British AI startup founded last month by three former Google DeepMind researchers, is reportedly nearing a $4bn (£2.9bn) valuation despite having no product or website.
The company is in advanced talks to raise as much as $700m in a seed funding round led by Index Ventures and Lightspeed Venture Partners. The proposed deal would value Emulate at $3.7bn including the new capital, although its terms have not been finalised and could change.
World models and an early-stage bet
Emulate was incorporated as recently as August and is operating in stealth. It is working on world models, AI systems designed to simulate and predict how physical environments behave.
Unlike large language models underpinning products such as ChatGPT and Gemini, which predict and generate language, world models aim to understand how actions affect an environment. They could allow a robotics company to test thousands of movements in simulated warehouses before putting a robot to work in the real world.
Emulate was founded by Jack Parker-Holder, Matthew McGill and Philip Ball, who previously worked on DeepMind’s Genie technology. Parker-Holder led the development of Genie 2, while all three founders contributed to Genie 3, which DeepMind describes as a world model capable of generating interactive environments from text prompts.
None of the three founders has previously run a company. The Financial Times first reported the prospective funding round, while the company has not publicly unveiled its technology or disclosed a commercial product.
Investors backing research teams
Charlie Dai, a vice president and principal analyst at Forrester, said the Emulate deal reflected investors betting on “future capability creation, not present revenue or commercial traction”.
Dai said investors were increasingly underwriting elite AI research teams before product-market fit, particularly in frontier areas where a breakthrough could create entirely new markets. He said venture investors were also increasingly backing teams with demonstrated experience building state-of-the-art foundation models in simulation, reasoning and world understanding, which he described as crucial for physical AI and robotics.
According to Dai, the funding reflected confidence in the founders’ ability to create category-defining technology rather than confidence in a specific product currently on the market.
DeepMind alumni attract venture capital
Emulate is the latest in a string of heavily funded AI startups to emerge from DeepMind. The prospective round follows major fundraises by other British AI labs founded by former DeepMind researchers this year, as investors compete to back experienced teams at increasingly early stages.
Fei-Fei Li’s World Labs has raised more than $1bn to develop spatial intelligence technology. Other companies are targeting simulations and robotics rather than competing directly with the large language models developed by OpenAI, Anthropic and Google.
Dai said investors’ willingness to fund proven research leaders with hundreds of millions of dollars before product launch meant some departures from established AI labs were inevitable. He said the movement of top talent into independent ventures reflected intense market demand for elite AI expertise rather than a decline in DeepMind’s technical leadership.
Source: City AM
