Weeks-Old AI Startup Emulate Approaches $4 Billion Valuation

Emulate, a month-old startup founded by former Google DeepMind researchers, is reportedly close to landing hundreds of millions of dollars in new funding.

The U.K.-based company is in advanced discussions with prospective investors to raise up to $700 million, valuing Emulate at $3.7 billion, the Financial Times (FT) reported Thursday (Sept. 17), citing sources familiar with the matter.

Emulate was incorporated in August and founded by DeepMind veterans including Jack Parker-Holder, Matthew McGill and Philip Ball, who helped develop its Genie world models.

That model reportedly can generate realistic videos and interactive 3D environments from a short prompt. As the FT notes, its debut in January shook the video games industry, erasing billions of dollars in market value from companies such as Take-Two, Roblox and Unity.

The FT adds that world models, trained to understand and replicate physical space, are considered a new frontier in artificial intelligence research that is less busy than the large language models that power the likes of ChatGPT or Claude.

Emulate has been operating in “stealth mode” and is the third AI lab to spin off from DeepMind’s London offices this year with hundreds of millions of dollars in financing, the FT said, adding that this demonstrates how venture capitalists continue to prize top AI research talent as they seek out the next OpenAI or Anthropic.

Ineffable Intelligence, AI startup launched by DeepMind veteran David Silver, raised $1.1 billion in April to develop its “superlearner.”

“Ineffable is building a system designed to generate knowledge from its own experience,” Lightspeed Venture Partners, which helped lead the round, said on its website. “One that learns not by extrapolating from human examples but by acting in engineering environments and learning from the signals those environments return.”

In other AI news, recent PYMNTS Intelligence research shows that companies with deeper levels of AI deployment are more likely to see an earlier payoff from the technology.

More than 9 out of 10 businesses that have embedded artificial intelligence into three or more functions say it is already providing a return, according to “AI at Work: Why Deeper Enterprise Use Produces Stronger Returns.”

By contrast, a little more than half of those enterprises with only one or two embedded functions say the same. Only a quarter of companies that haven’t embedded the technology in any function say that AI is already offering a return.

“These findings point to a broader shift in the enterprise AI race,” the report said. “Depth of AI tool usage, not breadth, is driving financial outcomes. That suggests that spending more and using AI in more places aren’t necessarily enough to generate a bang for the buck.”