A month-old AI start-up with no product is about to be worth $3.7 billion – and it’s run by the people who built Google’s Genie

Emulate was only incorporated in August. It has no public product and, until now, had no public profile. And according to the Financial Times, it’s in advanced talks to raise up to $700 million at a valuation of $3.7 billion, including the new money. The reason investors are lining up: its founders are the Google DeepMind researchers behind Genie.

Who’s behind it

The London start-up was founded by former DeepMind researchers including Jack Parker-Holder, Matthew McGill and Philip Ball, who helped create Genie, DeepMind’s “world model” that can turn a short prompt into a realistic video or an interactive 3D world you can move around in.

Genie made a big splash. The FT says its unveiling in January wiped billions of dollars off the value of video game companies including Take-Two, Roblox and Unity, as investors worried AI could one day generate games on demand.

Index Ventures and Lightspeed Venture Partners are set to co-lead the round, the FT reports, citing people familiar with the deal. Emulate, Index and Lightspeed all declined to comment, and the deal isn’t finalised yet.

Why world models are hot

World models are trained to understand how the physical world looks and behaves, not just to predict the next word like the large language models behind ChatGPT, Gemini and Claude. That makes them useful for building games and virtual worlds, and for training robots and AI agents in simulation before they’re let loose in the real world.

It’s also a less crowded field than chatbots, which is part of the appeal. A team that has already built one of the best-known world models doesn’t need a product to convince investors it can build another.

DeepMind’s London brain drain

Emulate is the third so-called “neo-lab” to spin out of DeepMind’s London offices this year with hundreds of millions of dollars in funding, according to the FT:

• Ineffable Intelligence, founded by former DeepMind researcher David Silver, raised about $1 billion at a $5 billion valuation
• Recursive Superintelligence, from former DeepMind and OpenAI engineers, raised more than $600 million at a $4 billion valuation
• Emulate would be the third, at $3.7 billion

The departures come at a turbulent moment for Google’s AI operation. The FT notes that DeepMind co-founder Sir Demis Hassabis said just weeks ago that he was stepping down as chief executive to become chair, and that Google’s chief scientist Jeff Dean left last month to start his own company, Discovery Loop.

Why it matters

Valuations like this are based almost entirely on reputation. Investors are betting that the people who built a breakthrough inside a Big Tech lab can do it again on their own, and they’re willing to pay billions for the chance to back the next OpenAI or Anthropic before it has shipped anything. For Google, it’s a costly pattern: it trained the talent, and now venture capital is buying it away.

Source: Financial Times