Nvidia's AI ambitions in medicine and health care are becoming clear
Last week, Nvidia announced deals with Johnson & Johnson for use of generative AI in surgery, and with GE Healthcare to improve medical imaging. The health care developments at its 2024 GTC AI conference, — which also included the launch of roughly two dozen new AI-powered, healthcare-focused tools — demonstrate just how important medicine is to Nvidia's non-tech sector revenue opportunities in the future.

"The reason why Nvidia is so popular today is because it basically provided the plumbing and the technology for something that you could not do simply before or if you had to do something like this you would need probably several times more time, money and cost," said Raj Joshi, a technology analyst and senior vice president at Moody's Ratings. "Health care, whether it's biotechnology, chemicals, or drug discovery is a very powerful area."



Nvidia shares are up close to 100% year-to-date, and the biotech industry is an example of the untapped potential that investors are continue to bet on. AI can speed up the process of drug discovery and even find uses for drugs that may have failed to produce results for the initial disease they were developed to target.



"Over the last 18 months or so, we tend to believe it is more hope than hype because of the tangible outcomes and then the very compelling use cases how AI helped with the pharmaceutical industry, medtech industry or biotech industry," said Arda Ural, EY Americas health and life sciences industry market leader.

Drug development is a risky process that can take at least a decade from concept to clinical studies, Ural said. It's also a process that can cost billions, with a high chance of failure.

About 41 percent of biotech CEOs surveyed by EY in late 2023 said they were looking at "concrete" ways generative AI could be used for their companies. "This is very high for my experience, having been 30 years in this industry," Ural said. "This is a really unique feature we are seeing with AI that's being picked up much faster than other technologies."



The health care focus from Nvidia at its conference was a doubling down on an ambition it's had for a long time. During an earnings call with investors in February, Nvidia mentioned several ways its technology was being adapted for the medical field. Companies like Recursion Pharmaceuticals and Generate: Biomedicines have been expanding their biomedical research with the help of hyperscale or GPU specialized cloud providers, and they need Nvidia AI infrastructure to facilitate the process.



"In healthcare, digital biology and generative AI are helping to reinvent drug discovery, surgery, medical imaging and wearable devices," said Colette Kress, Nvidia chief financial officer. "We have built deep domain expertise in healthcare over the past decade, creating the NVIDIA Clara healthcare platform and NVIDIA BioNeMo, a generative AI service to develop, customize and deploy AI foundation models for computer-aided drug discovery."

Last year, NVIDIA invested $50 million in Recursion for its drug discovery projects. Recursion is inputting its biological and chemical data to train NVIDIA's AI models on its cloud platform. The company has also worked with Roche's Genentech to develop new medications and better treatment protocols. It also partnered in 2021 with Schrödinger for drug discovery.