This paper describes 3D simulations of the formation of collapsing cold clumps via thermal instability inside a larger cloud complex . The initial condition was a diffuse atomic , stationary , thermally unstable , 200 pc diameter spherical cloud in pressure equilibrium with low density surroundings . This was seeded with 10 % density perturbations at the finest initial grid level ( 0.29 pc ) around n _ { H } =1.1 cm ^ { -3 } and evolved with self-gravity included . No magnetic field was imposed . Resimulations at a higher resolution of a region extracted from this simulation ( down to 0.039 pc ) , show that the thermal instability forms sheets , then filaments and finally clumps . The width of the filaments increases over time , in one particular case from 0.26 to 0.56 pc . Thereafter clumps with sizes of around 5 pc grow at the intersections of filaments . 21 distinct clumps , with properties similar to those observed in molecular clouds , are found by using the FellWalker algorithm to find minima in the gravitational potential . Not all of these are gravitationally bound , but the convergent nature of the flow and increasing central density suggest they are likely to form stars . Further simulation of the most massive clump shows the gravitational collapse to a density > 10 ^ { 6 } cm ^ { -3 } . These results provide realistic initial conditions that can be used to study feedback in individual clumps , interacting clumps and the entire molecular cloud complex .