How a Seattle VC firm broke into the $1.1B seed round for a DeepMind legend’s superintelligence startup

The venture world is still digesting the eye-popping debut of London-based Ineffable Intelligence, the new startup from DeepMind legend David Silver, which announced $1.1 billion in funding at a $5.1 billion valuation this week.

The deal — which CNBC called the largest-ever seed round for a European startup — drew heavyweight backers including Sequoia Capital, Lightspeed Venture Partners, Google and Nvidia.

But tucked inside the cap table is a less obvious name: Flying Fish Partners, a Seattle-based firm with less than $250 million under management that wrote the first check for the nascent company just four months ago.

So how did a relatively small and scrappy Pacific Northwest venture capital firm break into one of the most competitive AI deals in years?

Turns out it was less about check size and more about old-school hustle, networking and smarts, including years of relationship-building, a well-timed early bet, and a lot of flights to London. 

I caught up with Flying Fish Managing Director Frank Chang — who had just landed in London — to get the scoop on how his tiny Pacific Northwest firm managed to secure a front-row seat in one of the most ambitious moonshots in the race toward artificial general intelligence.

“We’ve been laying the foundations for an investment like this for years,” Chang said via email.

The story starts with Phaidra, a Seattle-based AI startup co-founded by a team that includes former DeepMind engineers Jim Gao and Vedavyas Panneershelvam. Flying Fish wrote one of the first checks for the company in 2020. The investment gave them more than a compelling portfolio company — it opened doors into the world’s most elite AI talent pool.

Chang and Flying Fish partners Heather Redman, Geoff Harris and others worked those connections, essentially making the firm a fixture in the London AI scene, where DeepMind started in 2010 before Google acquired it in 2014. 

They hosted enough coffee meetings and dinners with AI researchers that Flying Fish apparently became a recurring character in the “Ex-DeepMind” WhatsApp group. 

“There were so many gatherings over the years that I’ve been told founders would post on that group about which Flying Fish dinner they got invited to,” said Chang, who worked at Amazon and Microsoft before co-founding Flying Fish.

In fact, it was Heather Gorham, then a principal in the VC firm, who initially reached out to Silver after he published a paper titled “The Era of Experience,” which posited that a new approach was needed to AI since the “knowledge extracted from human data is rapidly approaching a limit.”

Chang and Gorham developed a strong relationship with Silver, discussing company goals, strategies, recruiting and a complementary philosophy on where AI is headed. The Phaidra investment also gave them credibility with Silver and his circle.

Gorham has since joined Ineffable’s founding team, according to her LinkedIn profile. 

By the time Silver — the mind behind AlphaGo and a leading figure in reinforcement learning — was ready to build his new startup, Flying Fish wasn’t just a random VC from Seattle; they’d established themselves at the forefront of the field. And they were ready to write a check. 

In the most recent round — which included Google, Nvidia and the U.K. Sovereign AI Fund — Flying Fish wrote the biggest check in the firm’s 10-year history. Chang declined to disclose the full size of Flying Fish’s investment in Ineffable. However, it was so large that they established a special purpose vehicle, a separate fund set up specifically for a single investment, to fund a large portion of it.

The big bet comes from a mutual understanding with Silver on how AI is changing, going beyond large language models (LLMs).

“Lots of investors are searching for the company that will deliver AGI or superintelligence, and there is a popular belief amongst many that LLMs can get there,” Chang said. “However, we hold the position that LLMs, powerful as they are, cannot. Many prominent AI researchers have the same view.” 

The thesis behind Ineffable is that LLMs have a ceiling. To reach AGI, or true superintelligence, you need a “superlearner.” That means discovering knowledge from its own experience, rather than just vacuuming up the internet’s existing data.

The company’s approach, as Silver described in a Wired profile this week, involves placing AI agents inside simulations where they can learn from experience, achieve goals and collaborate with one another.

Chang acknowledges this is an outlier in the “frontier lab” arms race where Anthropic has reached a $1 trillion valuation on secondary markets. But he argues the capital is a necessity. 

“If Ineffable achieves what it set out to, and far surpasses the capabilities of LLMs, the returns, even at a seed round value of over $5B will be well worth it,” he said. 

Beyond the math and the GPUs, what most impressed Chang about the investment was the entrepreneur behind Ineffable. 

“David is a genuinely good human being, down to earth, and likeable, but he is clearly driven by the mission, so much so that he has said he will give away what he makes from Ineffable equity to charity,” he said. “Combine all this with his pedigree, and he will be able to attract the very best talent to the company.”

In fact, in the Wired profile this week, senior writer Will Knight wrote, “Silver’s reputation as being both a top researcher and frankly, not an asshole, may work in his favor when it comes to recruiting talent.”

That also stands out to Chang at Flying Fish. 

“Add it all up and you have one of the most respected and prominent AI researchers on the planet who is mission oriented, a good person, has built a rock star team, and is going after a huge swing that could change the world,” said Chang. “What’s not to like?”

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