Andreessen Horowitz (a16z) is set to lead a $200 million financing round for Periodic Labs, a newly formed artificial intelligence materials science company, according to people familiar with the matter. The deal values the startup at $1 billion pre-funding, a striking figure for a company just months into its operations.
Sources indicate that Periodic Labs initially planned for OpenAI to lead the round. However, founders decided that a16z could provide broader strategic support and resources. OpenAI will still participate in the financing and may collaborate with the startup in future projects. The round is not yet closed, and deal terms could still change.
Founders with deep AI credentials
Periodic Labs was founded by Liam Fedus, former vice president of research at OpenAI and a key architect of ChatGPT, alongside Ekin Dogus Cubuk, previously a research scientist at Google DeepMind. Their mission is to leverage AI to analyse and design new materials, potentially enabling breakthroughs across sectors from energy storage to electronics. Fedus, who has long expressed interest in AI for scientific discovery, had earlier voiced enthusiasm for partnering with OpenAI in this domain.
Periodic Labs is currently developing AI tools that can model and predict material properties with greater accuracy and speed than traditional methods, potentially reducing the time and cost of innovation in sectors such as energy, electronics, and construction.
Rise in “OpenAI alumni effect”
Fedus joins a wave of former OpenAI leaders launching high-value startups, a phenomenon likened to the Google and PayPal alumni era. Notable examples include Anthropic, founded by Dario and Daniela Amodei, and Thinking Machines Lab, recently valued at $10 billion and started by former OpenAI executive Mira Murati. Investors have poured more than $42 billion collectively into ventures led by ex-OpenAI employees, viewing them as exceptional talent in a competitive AI market.
The appetite extends beyond Periodic Labs. Recently, former OpenAI staffers Rhythm Garg, Linden Li, and Yash Patil founded Applied Compute, securing a $100 million valuation from Benchmark despite being in the earliest stages. These valuations highlight the premium placed on founders with cutting-edge AI expertise.
AI’s dominance in venture funding
Periodic Labs’ fundraising comes amid a strong run for AI startups in venture capital markets. In Q2 2025, 11 AI-focused companies collectively raised over $1 billion, accounting for more than a third of the quarter’s $91 billion global VC total. July alone saw AI capture 37% of all venture funding, surpassing healthcare ($5.7 billion) and financial services ($4.6 billion).
Major July rounds included xAI’s $5 billion raise led by SpaceX, the third-largest VC deal of the year, trailing only OpenAI’s $40 billion SoftBank-led round in March and Meta’s $14.3 billion investment in Scale AI in June.
Implications for the AI and materials science market
The backing from Andreessen Horowitz signals growing investor conviction in AI’s role in accelerating material science. By using machine learning models to simulate and predict material properties, companies like Periodic Labs aim to shorten the time from concept to application, a process that can otherwise take years of trial-and-error research.
With the deal, A16z positions itself at the forefront of AI-driven science, while Periodic Labs gains not only capital but also a strategic network to navigate commercialisation and scaling. If successful, the company could influence industries ranging from clean energy to semiconductors, reshaping supply chains and technological capabilities.
Periodic Labs’ rapid rise reflects both the intense competition for AI talent and the willingness of venture firms to fund science-focused applications at early stages. The outcome of its first major projects will be closely watched by both the venture capital and scientific communities.
