Disclosure certainty 4/5 debate potential 1/5

Menlo Ventures has backed about eight drug discovery AI models

Matt Murphy · Will Open-Source Threaten Anthropic's Business & Do Margins Matter in a World of AI | Matt Murphy · Jul 27, 2026 · at 1:04:20

Matt Murphy is a partner at Menlo Ventures. He outlines Menlo's investment portfolio strategy around specialized foundation models in life sciences.

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“We have about eight of these models. I mentioned Chai, but we have a company I can go down the list of companies building specific models to do drug discovery.”

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More from Matt Murphy

Prediction Not checkable as stated
Open-source models will not displace top foundation models like Anthropic
“I think the foundation models, let's say specifically Anthropic, have such special models. This can be hard for somebody to just kind of say, I've used open source with my data. It's going to be functional and positive for some amount of what you're doing, but…”
Matt Murphy Jul 27, 2026 ▶ 0:00 Will Open-Source Threaten Anthropic's Business & Do Margins Matter in a World of AI | Matt Murphy
Insight
Small stakes in massive outliers beat high ownership in mid-sized exits
“You have to be in the big outliers to drive great returns, and you're better off being in them at a very small percent than owning a large percent of a company that exits for three to 500. Those just aren't going to move the needle.”
Matt Murphy Jul 27, 2026 ▶ 8:09 Will Open-Source Threaten Anthropic's Business & Do Margins Matter in a World of AI | Matt Murphy
Assertion Supported
Lovable scaled from zero to $300M ARR within one year
“Where you see a company go from zero to something like three hundred million in a year. I think we intercepted them around, well, we kind of got, tried to get in when they were around 30, 30 of error, but we around, we did was around one 50.”
Matt Murphy Jul 27, 2026 ▶ 19:18 Will Open-Source Threaten Anthropic's Business & Do Margins Matter in a World of AI | Matt Murphy
Insight
AI compute costs cap startup gross margins at 60% to 70%
“You know, a lot of companies, just because of the cost of computing inference, it's harder to say you're going to be an 80, 90% gross margin company anymore. But, you know, great companies are, you know, 60, 70% gross margin.”
Matt Murphy Jul 27, 2026 ▶ 21:15 Will Open-Source Threaten Anthropic's Business & Do Margins Matter in a World of AI | Matt Murphy
Assertion Not checkable as stated
Using Anthropic drives higher retention and revenue than open-source models
“What's happening is companies see this, like, yes, I can get lower cost, but if I use Anthropic, it actually increases my customer retention. I generate more revenue. I get users to Engage with the platform more. And that is what the data is suggesting now wit…”
Matt Murphy Jul 27, 2026 ▶ 25:06 Will Open-Source Threaten Anthropic's Business & Do Margins Matter in a World of AI | Matt Murphy
Disclosure
Menlo Ventures' Anthropic position is worth over $10 billion
“No, our position is, is north of that, but that's not that you can do the math on what carry usually is.”
Matt Murphy Jul 27, 2026 ▶ 55:02 Will Open-Source Threaten Anthropic's Business & Do Margins Matter in a World of AI | Matt Murphy
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