AI-based Drug Discovery Market 2024 – Market Size & Segments Analysis, Industry Trends, Manufacturers Analysis, Opportunities and Forecast 2030

The global market value of the AI-based drug discovery market was 1.8 billion in 2023, and a CAGR of 22.1% is expected during the forecast period. Growing interest in AI-driven technologies, the need for innovative therapies to address chronic diseases, and increasing availability of healthcare data are driving growth in the market. Increased investment in funding from pharmaceutical companies and government agencies is driving growth in the market. Traditional drug discovery processes are time-consuming and expensive, often taking 10-15 years and billions of dollars.

AI accelerates these processes by identifying potential drug candidates and optimizing lead compounds, reducing costs. AI models like deep learning and neural networks enable precise predictions in molecular interactions, drug repurposing, and target identification. Growing investment by pharmaceutical and biotechnology companies is heavily investing in AI to enhance their R&D pipelines. Partnerships between pharma companies and AI firms are becoming more common.

Growth Drivers

Major industry players and startups are heavily investing in AI to enhance their research & development pipelines. The expansion of precision medicine initiatives and the need for personalized therapies based on genetic, environmental, and lifestyle factors have fueled AI adoption to analyze vast datasets for targeted drug discovery. Access to big data from electronic health records, genomic databases, and clinical trials provides a robust foundation for training AI algorithms.

Increasing prevalence of chronic diseases like cancer, diabetes, and neurodegenerative disorders drives the need for new treatments, encouraging AI use to address unmet clinical needs. Development in AI for simulating biological systems and chemical reactions further enhances its applications in early-stage drug discovery.

The pandemic highlighted the potential of AI in rapid drug discovery and vaccine development, demonstrating its value in urgent situations. Patent expirations and pricing pressures push companies to optimize resources. AI provides cost-efficient solutions by reducing trial-and-error processes. Growing number of cross-industries collaboration and partnerships, the need to control drug discovery and development costs and reduce the overall time taken in this process, and the increasing focus on oncology indication. Increasing demand to develop human-aware AI systems is driving growth in the market significantly.

Segmentation

By Offering

·         Software

·         Services

By Technology

·         Machine Learning

·         Deep Learning

·         Natural Language Processing

·         Computer Vision

By Application

·         Drug Discovery

·         Preclinical Testing

·         Clinical Trail Design and Optimization

·         Drug Repurposing

·         Other Application

By Drug Type

·         Small Molecules

·         Biologics

By Deployment Mode

·         On-Premise

·         Cloud-Based

By End-User

·         Pharmaceutical and Biotechnology Company

·         Academic and Research Institutes

·         Contract Research Organizations

Regional Outlook

·         Asia Pacific

·         North America

·         Latin America

·         Middle East and Africa

·         Europe

AI-based Drug discovery Market by Application Segmentation

On the basis of application, The AI-based Drug discovery Market is segmented into Drug Discovery, Preclinical Testing, Clinical Trail Design and Optimization, Drug Repurposing, and Other Application. Due to high investment in Research and Development the drug discovery segment is the leading one AI is extensively used for target identification, validation, and lead optimization, which are critical steps in drug discovery.

AI significantly reduces the time and cost required to identify viable drug candidates compared to traditional methods. Partnerships between AI technology providers, and pharmaceutical firms are heavily focused on drug discovery projects. The demand for new unmet therapies to address unmet medical needs has further propelled the adoption of AI in this segment.

AI-based Drug discovery Market by Offering Segmentation

On the basis of the offering, the AI-based Drug discovery market is segmented into Software, and Services. Software is the leading segment because AI software platforms are at the heart of drug discovery process enabling applications like target identification, virtual screening, and molecule optimization. Software services can be deployed on-premise via cloud, making them scalable and accessible for pharmaceuticals companies and Research institutions. AI technologies like Machine Learning, NLP, and Deep learning is integrated into software solutions, making them indispensable for tasks such as data analysis, and predictive modelling.

AI-based Drug discovery Market by drug type Segmentation

On the basis of the drug type, the AI-based Drug market is segmented into small molecules, and biologics. Small molecules have currently been the foundation of drug development for decades and account for a majority of FDA-approved drugs. Development of small molecules due to their simpler chemical structures in comparison to biologics.

Small molecules target intracellular, and extracellular pathways, making them suitable for various therapeutic areas, like oncology, cardiovascular diseases, neurogenerative disorders, and infectious diseases. Increasing prevalence of chronic diseases like cancer, diabetes, and neurodegenerative disorders drives the need for new treatments, encouraging AI use to address unmet clinical needs. Development in AI for simulating biological systems and chemical reactions further enhances its applications in early-stage drug discovery.

Regional Outlook

On the basis of the regions, the AI-based drug discovery market is segmented into 5 regions: Asia Pacific, North America, Latin America, the Middle East and Africa, and Europe. North America is the leading segment and is expected to dominate the market during the forecast period. The U.S. is home to major tech companies and AI-driven pharmaceutical firms. High investment in AI and research and development and advanced computational infrastructure is a driving factor in market growth. Strong venture capital funding for biotech and AI-based startups is driving the growth in the market.

Substantial public and private investment in AI healthcare technologies are driving factors in market growth. Increasing adoption of AI to reduce the cost of drugs is driving growth in the market significantly. High population diversity in Asia Pacific provides vast datasets to analyze, enabling precision medicine is driving growth in the market. Lower costs for research development and AI implementation compared to North America and Europe, making the region attractive for global collaboration. Presence of key players like Microsoft, and Google are the driving force for the market growth significantly. Rising disposable income, and increasing urbanization along with technological advancements in countries like China, Japan, India, and South Korea is the key factor behind the significant growth in the market.

Key Players

·         Microsoft

·         Recursion

·         Google

·         Nivida Corporation

·         Tempus

·         Owkin, Inc.

·         Valo Health

·         DEEP Genomics

·         Merck KGaA

·         Iktos

·         Tempus

·         Schrodinger, Inc.

·         Atomwise Inc.

·         Xtalpi Inc.

·         Other Players