This was a week that made one pattern impossible to ignore: capital is flooding into AI at every layer of the stack simultaneously — from frontier model companies building consulting arms (OpenAI, Anthropic), to AI-native drug design (Isomorphic Labs), to autonomous defense systems (Anduril), to vertical customer-experience applications (Sierra). The Bristol Myers–Hengrui mega-pact and the Isomorphic Labs raise together signal that AI is no longer just disrupting how drugs are discovered but also reshaping the geopolitical architecture of who discovers them. Against that backdrop, FDA Commissioner Makary's resignation is a pointed reminder that the real bottlenecks to deploying any breakthrough — AI or biological — remain institutional and political, not technical. With Google I/O opening the morning after this briefing publishes, the week ahead will test whether distribution scale (Gemini on billions of Android devices) can match the raw capability arms race that private capital is funding at a historic pace.
Defense-tech unicorn Anduril Industries closed a $5 billion Series H led by Andreessen Horowitz and Thrive Capital, valuing the company at $61 billion — double its $30.5 billion valuation from less than a year ago and bringing total capital raised to $11.4 billion. The round comes on the heels of a $20 billion, 10-year U.S. Army contract and Anduril's role in the $185 billion Golden Dome missile-defense program. Defense-related startups have now raised nearly $13.6 billion in 2026 through mid-May, putting the sector on track to more than double last year's already-record $8.8 billion haul.
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Alphabet-backed Isomorphic Labs — the DeepMind spinout led by Sir Demis Hassabis — raised $2.1 billion in a Series B led by Thrive Capital, with sovereign wealth participation from Abu Dhabi's MGX, Singapore's Temasek, and the UK Sovereign AI Fund, bringing total funding to roughly $2.6 billion. Capital will be deployed to advance the company's AI Drug Design Engine (IsoDDE) and push wholly-owned therapeutic programs toward Phase I trials for the first time. The round is one of the largest private financings ever in the AI drug discovery space, and validates Isomorphic's existing big-pharma partnerships with Novartis, Eli Lilly, and Johnson & Johnson.
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Dr. Marty Makary resigned as FDA Commissioner on May 12, ending a turbulent 13-month tenure after White House pressure forced the agency to approve fruit-flavored e-cigarettes from Glas Inc. — a decision Makary had repeatedly refused to make. Trump named Kyle Diamantas, the FDA's top food regulator and a lawyer without a medical degree, as acting commissioner while a permanent search begins. The departure — the fourth high-profile Trump administration exit this year — leaves the FDA with acting directors in multiple senior roles, deepening uncertainty over drug-approval timelines, mifepristone policy, and the agency's scientific independence.
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Bristol Myers Squibb and China's Hengrui Pharma announced a global strategic collaboration on May 12 covering 13 early-stage programs across oncology, hematology, and immunology, with potential total value up to $15.2 billion — including a $600 million upfront payment and up to $350 million in anniversary payments through 2028. Under the cross-border structure, BMS gains exclusive ex-Greater-China rights to four Hengrui oncology assets while Hengrui receives commercialization rights in Greater China for four BMS immunology drugs, plus joint discovery of five additional programs. The deal ranks as the second-largest pharma licensing pact since early 2025, trailing only AstraZeneca's $18.5 billion tie-up with CSPC in January, and reflects accelerating Western reliance on Chinese drug pipelines.
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Sierra, a three-year-old San Francisco company building AI-driven customer experience tools, closed a $950 million funding round led by Google Ventures and Tiger Global, valuing the startup at $15 billion. The week's prior biggest round in the AI space, it highlights investors' conviction that vertical AI applications — particularly those sitting between enterprise brands and end consumers — justify frontier-level valuations. Sierra's raise came in a week where the top ten U.S. startup rounds also included Anduril, space-compute startup Cowboy Space ($275M), and AI software-dev platform Blitzy ($200M), underscoring the breadth of the current AI capital cycle.
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With Google I/O 2026 opening May 19 at Shoreline Amphitheatre, leaked UI strings and pre-event briefings point to several headline announcements: a new unified Gemini model capable of generating text, images, and video in a single pipeline (dubbed Gemini Omni); Android XR smart glasses with four hardware partners including Samsung, XREAL, Warby Parker, and Gentle Monster; and Aluminium OS, a merged Android-ChromeOS laptop platform backed by Acer, Asus, Dell, HP, and Lenovo. The Gemini model update is widely expected to compete directly with OpenAI's GPT-5.5 Instant, which became ChatGPT's default earlier in May. Google's ability to embed Gemini across billions of devices — not merely win benchmark comparisons — is the strategic thesis being tested.
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OpenAI's planned Deployment Company is raising roughly $4 billion while Anthropic's comparable initiative has secured approximately $1.5 billion, both backed by major private equity firms and designed to acquire engineering services and consulting businesses that can deploy AI at enterprise scale. The strategy reflects a growing recognition that last-mile implementation — data integration, workflow customization, and governance — is as strategically important as model capability itself. The moves echo how cloud hyperscalers built partner ecosystems in the 2010s, and signal that the AI industry's next margin war will be fought in professional services, not model benchmarks.
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