Emulate, a month-old British AI startup founded by former Google DeepMind researchers, is in advanced talks to raise as much as $700 million at a $3.7 billion post-money valuation, the Financial Times reported Wednesday.

Index Ventures and Lightspeed Venture Partners are expected to lead the seed round, according to the FT report, which cited people familiar with the talks. Bloomberg also reported the funding discussions, adding that Creandum is expected to participate.

The funding would value Emulate at $3 billion before the investment and $3.7 billion after including the new capital.

The planned round has grown since the startup was first reported. Sifted reported last month that Jack Parker-Holder was seeking $500 million for a new London AI lab, with Index in talks to lead.

Emulate was founded last month by Parker-Holder, Matthew McGill and Philip Ball. The three previously worked on DeepMind's world-model team and helped develop its Genie models.

World models are AI systems that learn how the physical world works and can recreate it. DeepMind's Genie can create videos and interactive 3D worlds from short prompts.

Emulate has been operating in stealth and has not shared details about its products or when it plans to launch.

VC firms are increasingly investing in startups founded by former researchers from major AI labs. Former DeepMind researcher David Silver raised about $1 billion at a $5 billion valuation in April for Ineffable Intelligence. Another British startup, Recursive Superintelligence, raised $650 million in May at a $4.65 billion valuation from investors backing a team of former DeepMind and OpenAI engineers.

AMI Labs, co-founded by former Meta chief AI scientist Yann LeCun, raised just over $1 billion in March. Former Google chief scientist Jeff Dean also left the company last month to start U.S.-based AI company Discovery Loop, which is reportedly seeking fresh funding at a valuation of around $50 billion.

Emulate's funding talks come about six weeks after DeepMind co-founder Demis Hassabis said he would step down as CEO and become chair of the AI lab.