Artificial Intelligence (AI) is rapidly becoming one of the most important technological advances in healthcare, with growing implications for both pharmaceutical companies and long-term investors.  

Traditionally, discovering and developing a new medicine has been a costly, time-consuming process. Success rates have historically been low, making research and development (R&D) one of the largest risks facing pharmaceutical companies. AI has the potential to materially improve this process by helping researchers identify promising drug candidates faster, reducing development timelines, and enabling resources to be directed toward the most promising opportunities.  

The opportunity is attracting significant industry investment. According to industry research, the global market for AI-powered drug discovery is estimated to grow from approximately USD$3.1 billion in 2025 to almost USD$44 billion by 2035, highlighting the rapid adoption of AI-driven technologies across pharmaceutical and biotechnology companies.  

Importantly, AI is now moving beyond the experimental stage. Pharmaceutical and biotechnology companies are increasingly using machine learning and advanced data analytics to identify drug targets, screen potential compounds, optimise clinical trial design, and evaluate the commercial viability and likelihood of success. The application of these AI-driven processes has the potential to lower development costs, improve research productivity, and accelerate the delivery of new therapies to patients. 

This trend is particularly relevant given the growing global burden of chronic diseases such as cancer, cardiovascular disease and neurological disorders. As healthcare systems seek more effective treatments and personalised therapies, demand for innovative drug discovery approaches is expected to remain strong. AI emerging as a key tool to help meet this need. 

For investors, the significance extends beyond individual companies. We view AI-enabled healthcare innovation as a long-term structural growth theme that has the potential to create substantial value across the broader healthcare ecosystem, including biotechnology companies, specialised healthcare software providers, research platforms, and pharmaceutical business that successfully integrate AI into their development processes.  

While innovation-led sectors can experience periods of higher volatility, we continue to see attractive long-term opportunities in businesses that are well positioned to benefit from technological advances in healthcare. As always, exposure to growth themes of this nature is balanced alongside more defensive investments to ensure that the funds and portfolios are risk-efficient, while still remaining positioned for long-term growth. 

What we’re reading: AI Drug Discovery Pipeline 2026 | Healthcare Discovery