A16z will lead a $200 million funding round for Periodic Labs, valuing it at $1 billion

According to insiders, VC firm Andreessen Horowitz (A16z) will lead a $200 million financing round for Periodic Labs, a nascent AI material science company. The agreement gives the startup a pre-funding valuation of $1 billion.

Sources, however, claimed Periodic Labs had earlier selected OpenAI to lead the round, but turned toward Andreessen Horowitz because it believed the firm could provide more support. Nonetheless, OpenAI will still be involved in the funding and possibly collaborate further with the startup.

OpenAI’s Fedus established Periodic Labs, joining other alumni who launched startups

Liam Fedus, a former OpenAI research leader instrumental in ChatGPT’s creation, teamed up with ex-DeepMind scientist Ekin Dogus Cubuk to launch Periodic Labs. Together, they were hoping to use AI to analyze materials and uncover new ones. Back in March, Fedus even posted, “But I’ve gotten really excited about AI for science,” sharing his desire to work with OpenAI as a partner. 

Fedus is now part of a swelling circle of OpenAI veterans creating startups — a group that’s drawn parallels to the famed “PayPal mafia” of Elon Musk and Peter Thiel. Anthropic, for instance, was founded by siblings Dario and Daniela Amodei, while Thinking Machines Lab, now valued at $10 billion, was started by Mira Murati, another OpenAI alum. 

Investors are now clamoring to buy into startups created by ex-OpenAI employees and other AI veterans, willing to pay premium prices for what they consider exceptional talent. Collectively, former OpenAI staffers have raised over $42 billion to fund their startups. Now, people familiar with the matter says A16z will lead a $200 million financing for Periodic Labs, adding to the investment count

AI startups received 37% of VC funding in July

During Q2 2025, 11 AI startups raised more than $1 billion, absorbing more than a third of the quarter’s $91 billion venture capital total. Moreover, this July, the top startup fundraising went to xAI, which secured $5 billion in a round headed by Musk’s SpaceX. The deal was also the year’s third-biggest, surpassed only by OpenAI’s $40 billion round with SoftBank in March and Meta’s $14.3 billion bet on Scale AI in June.

In July, $200 million-plus rounds collectively hit $11.4 billion — nearly 38% of all private venture-backed funding. Most were spearheaded by corporate players, private equity, or alternative investors, with OpenEvidence and Lovable the only exceptions, led purely by venture capital firms. Overall, U.S. startups have attracted more than $17 billion in funding in July alone, representing 58% of global venture capital.

AI also captured 37% of VC funding, ahead of healthcare and biotech at $5.7 billion. Financial services posted $4.6 billion in investment, marking a year-over-year doubling.

Nonetheless, venture capital activity cooled in July, easing off from the pace seen in June. The VC funding for July 2025 ($29.7 billion) was about the same as it had been in the same month the previous year, but down from June’s $43 billion. Seed-stage ventures received 10% of July’s VC dollars, early-stage firms took around 30%, and late-stage companies secured 60%. 

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