A UK start-up called Emulate, founded by former researchers at Google’s DeepMind AI lab, is in advanced talks to raise up to $700 million (£524m) at a valuation of $3.7bn post-capital, after incorporating only in August, the reported, citing unnamed sources familiar with the talks.

The UK’s Index Ventures and US-based Lightspeed Venture Partners are planning to jointly lead the round, the report said.

The start-up, which has been operating in stealth mode, was founded by former DeepMind researchers including Jack Parker-Holder, Matthew McGill and Philip Ball, who worked on DeepMind’s Genie world models.

Google has promoted the Genie models as a means of generating realistically detailed virtual worlds that can be used to train robots and autonomous vehicles in simulated environments such as warehouses or roads.

Google launched the Genie 3 world model in August of last year, and made it available to a wider user base in January.

The research is part of a growing focus on applying AI technology to the physical world, through autonomous vehicles, robotics and other devices, an area that has seen increased investor interest as the market for large language models has become more crowded.

Emulate is reportedly also involved in world-model research.

DeepMind shift

This year has seen the emergence of two other AI labs founded by former DeepMind researchers, David Silver’s Ineffable Intelligence, which raised about $1bn at a $5bn valuation, and Recursive Superintelligence, which raised more than $600m at a $4bn valuation.

Demis Hassabis, who co-founded DeepMind and sold it to Google in 2014, stepped down as the unit’s chief executive last month to become its chair, handing over day-to-day operations.

The move coincided with the departure of at least four senior AI staff from Google, leading to speculation around the challenges faced by Google and other high-profile tech companies in retaining AI talent.