AI in Pharma and Biotech Market Size, Share & Industry Analysis, By Technology (Machine Learning & Deep Learning, Natural Language Processing, and Others), By Application (Drug Discovery & Development, Clinical Research & Optimization, Precision Medicine, Pharmaceutical Manufacturing, Operations & Medical Affairs, and Others), By End User (Pharmaceutical & Biotechnology Companies, CDMOs & CROs, and Others), and Regional Forecast, 2026-2034

The global AI in pharma and biotech market size was valued at USD 6.63 billion in 2025. The market is projected to grow from USD 8.54 billion in 2026 to USD 154.10 billion by 2034, exhibiting a CAGR of 43.55% during the forecast period.

AI in pharma & biotech means using machine learning, deep learning, and other AI techniques for the discovery, development, manufacturing, and commercialization of drugs and biologics faster and more efficiently. This is done by learning patterns from large datasets such as omics, images, clinical data, real-world data, chemistry, literature, and others and helping in better decision making. The market is witnessing a significant growth owing to the wider adoption of generative AI for molecular design.

Moreover, the industry encompasses key players such as Insilico Medicine, Recursion, and IBM, among others. These companies are emphasizing on the launch of new technologies to gain a higher position in this marketspace. 

AI IN PHARMA AND BIOTECH MARKET TRENDS

AI Usage Moving from Pilot Projects to Production Workflows is a Significant Market Trend

In recent years, AI in pharma and biotech is increasingly shifting from small pilots to production workflows as companies now want repeatable ROI. As use-cases mature, AI is being embedded into day-to-day research & development and operations such as molecule design, clinical operations, manufacturing optimization, and content-heavy medical/regulatory work. This move forces firms to build production-grade foundations, clean data pipelines, MLOps/ModelOps, monitoring, and clear ownership so models perform reliably over time. These factors are supporting the overall global market growth.

• For instance, in October 2025, Eli Lilly announced it is building a pharma-owned AI supercomputer with NVIDIA to power an AI factory that manages the full AI lifecycle through high-volume inference.

Download Free sample to learn more about this report.

MARKET DYNAMICS

MARKET DRIVERS

Wider Adoption of Generative AI for Molecular Design and De‑Novo Chemistry is Boosting Market Expansion

Wider adoption of generative AI for molecular design and de‑novo chemistry is a prominent driving factor for the global market growth. Generative AI accelerates molecule designing by learning patterns from chemistry and assay data and proposing novel, valid molecules rather than only screening known libraries. It supports multi-objective optimization, so researchers can generate and prioritize candidates that better fit target product profiles earlier. This increases targeted molecules, improves lead quality, and reduces time from hit-to-lead/lead optimization, which directly lifts spending and adoption. All these factors are cumulatively driving the global AI in pharma and biotech market growth.

• For instance, in October 2025, Flagship Pioneering announced Expedition Medicines, a platform focused on generative covalent chemistry and training generative chemistry models to deliver de-novo small molecules, backed by an initial USD 50 million commitment and linked to work under Flagship’s partnership with Pfizer.

MARKET RESTRAINTS

Regulatory and Validation Hurdles for AI‑designed Candidates and Clinical‑Decision Tools to Limit Market Growth

Regulatory and validation hurdles restrain adoption of AI in the pharma and biotech industry. This is as regulators need clear evidence that AI outputs are credible, reproducible, and fit-for-purpose before they can influence drug or clinical decisions. Also, for AI-designed drug candidates, sponsors must prove data provenance, model performance, bias controls, and robustness across the intended context of use, which adds time and cost versus traditional workflows. This results in limiting the market growth to a certain extent.

• For instance, in January 2025, the U.S. FDA issued draft guidance focused on ensuring model credibility for AI used in drug/biologic submissions and noted parallel guidance activity for AI-enabled medical devices.

MARKET OPPORTUNITIES

Increased Cloud/Compute Partnerships and Specialized AI Accelerators to Offer Market Growth Opportunities

In pharma and biotech, models are getting larger and more compute-hungry, so many research teams can’t scale from experiments to enterprise rollout using on-premise resources alone. That creates a clear market opportunity for cloud providers, GPU players, and HPC specialists to partner with life-science firms and sell ready-to-run AI stacks. Moreover, cloud/compute partnerships reduce upfront capex and shorten procurement cycles, letting R&D teams spin up compute on demand for screening, simulation, and generative design. Additionally, specialized AI accelerators cut training/inference time, so companies can run more iterations and reach candidates faster, improving ROI. As adoption grows, demand shifts to long-term contracts for capacity, managed platforms, and optimized pipelines, opening recurring revenue for infrastructure and solution vendors. All these factors would drive the market growth in the coming years.

• For instance, in January 2026, Zealand Pharma announced an agreement with DCAI to use Gefion, Denmark’s AI supercomputer to integrate enterprise-scale AI into accelerating drug discovery workflows.

MARKET CHALLENGES

Integration between AI platforms and existing discovery pipelines Create a Significant Challenge to Market Growth

Integration between AI platforms and existing discovery pipelines is a major market challenge. This is due to the reason that most R&D stacks are fragmented across ELN/LIMS, registration systems, assay databases, modeling tools, and lab automation. Connecting AI to day-to-day workflows usually requires heavy API work, data harmonization, identity/access controls, and change management, raising time and cost to deploy. Moreover, researchers also face versioning and audit-trail needs, which slows rollouts in regulated or quality-managed environments. As a result, many AI initiatives stall after pilots as scientists won’t switch tools unless AI is embedded directly inside their familiar workbench. All the factors cumulatively affect the market growth.

• For instance, in January 2026, Schrödinger announced that Lilly’s TuneLab AI workflows will be made available inside Schrödinger’s LiveDesign as a “priority interface,” explicitly signaling the market need to integrate AI into an existing enterprise discovery platform rather than run it as a standalone tool.

Segmentation Analysis

By Technology

Rising Demand for Machine Learning to Propel Segmental Growth

Based on the technology, the market is divided into machine learning & deep learning, natural language processing, and others.

The machine learning & deep learning segment is anticipated to capture the largest global AI in pharma and biotech market share. This is due to the fact that it works well on high-dimensional data such as omics, imaging, high-throughput screening readouts, where classical analytics and rules-based methods struggle. Also, ML/DL spend is reinforced by large sponsor datasets and in-house DS teams. Additionally, in Asia Pacific, it is boosted by scaling discovery plus automation-driven efficiency.

• For instance, in October 2025, Algen Biotechnologies announced a multi-target partnership with AstraZeneca to accelerate preclinical discovery using its AI driven platform.

The natural language processing segment is anticipated to rise with a CAGR of 43.46% over the forecast period.  

To know how our report can help streamline your business, Speak to Analyst

By Application

High Demand in Drug Discovery & Development Supported Segmental Dominance

Based on the application, the market is divided into drug discovery & development, clinical research & optimization, precision medicine, pharmaceutical manufacturing, operations & medical affairs, and others.

In 2025, the drug discovery & development segment led with the largest global market share. The segment dominance is supported by higher spending on R&D, and shifting focus on integration of AI in these drug development pathways. Furthermore, the segment is set to hold 29.8% share in 2026.

• For instance, in September 2024, Generate Biomedicines announced a multi-target collaboration with Novartis to discover and develop protein therapeutics using its generative AI platform.

The precision medicine segment is anticipated to rise with a CAGR of 40.55% over the forecast period.  

By End User

Increasing Usage by Pharmaceutical & Biotechnology Companies Supported their Leading Position

On the basis of end user, the market is segmented into pharmaceutical & biotechnology companies, CDMOs & CROs, and others.

In the 2025 global market, pharmaceutical & biotechnology companies captured the dominating share. These companies own the biggest R&D and manufacturing budgets, so most AI spending is with the sponsor who controls pipeline priorities and capital allocation. In addition, they also capture the direct payoff of AI, which makes it easier to justify enterprise-scale rollouts versus one-off projects. Furthermore, the segment is set to hold 54.9% share in 2026.

• For instance, in March 2025, Roche announced the launch of the Roche Genentech Innovation Center Boston, highlighting investment in data science and AI specialists to drive innovation and accelerate drug discovery and development.

In addition, CDMOs & CROs are expected to grow at a 43.31% CAGR during the forecast period.

AI in Pharma and Biotech Market Regional Outlook

By region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

North America

To get more information on the regional analysis of this market, Download Free sample

North America dominated the global market and was valued at USD 2.43 billion in 2024. The region also dominated the global market in 2025, with USD 3.43 billion. The regional growth is supported by dense pharma/biotech clusters, deep venture capital funding, and early adoption of GenAI across discovery, clinical operations, and medical affairs. Large biopharma also drives demand for end-to-end partners to shorten cycle times and reduce attrition.

U.S. AI in Pharma and Biotech Market

The U.S. market captured the leading share of the North American market and can be analytically approximated at around USD 4.42 billion in 2026, accounting for roughly 51.8% of global market.

Europe

Europe market value is expected to grow at a CAGR of 44.70% in the study  period. The European market benefits from a strong base in life-science automation, advanced manufacturing, and regulated quality systems, which supports scaling AI from discovery into development and production. Additionally, growth is further supported by cross-industry engineering capabilities and collaborative innovation models that reduce implementation risk for pharma.

U.K. AI in Pharma and Biotech Market

The U.K. market value in 2026 is estimated at around USD 0.40 billion, representing roughly 4.7% of global revenues.

Germany AI in Pharma and Biotech Market

Germany’s market size is projected to reach approximately USD 0.45 billion in 2026, equivalent to around 5.3% of global sales.

Asia Pacific

Asia Pacific market size is projected to be valued at USD 1.35 billion in 2026 and secure the position of the third-largest region in the global industry. Factors promoting regional market growth include new AI labs, increasing cloud/GPU availability, and faster commercialization cycles in leading hubs. The region also benefits from rapid biotech ecosystem build-out, expanding CDMO capacity, and government-linked innovation infrastructure in turn supporting AI adoption in discovery, process development, and scale-up.

Japan AI in Pharma and Biotech Market

The Japan market value in 2026 is estimated at around USD 0.20 billion, accounting for roughly 2.3% of global revenues.

China AI in Pharma and Biotech Market

China’s market size is projected to reach revenues of around USD 0.42 billion in 2026, representing roughly 4.9% of global sales.

India AI in Pharma and Biotech Market

The India market value in 2026 is estimated at around USD 0.17 billion, accounting for roughly 2.0% of global revenues.

Latin America and Middle East & Africa

Latin America and the Middle East & Africa regions are anticipated to hold the smaller portion of the global market. These regions are projected to grow at a slower rate over the study period. This growth is supported by expanding private healthcare and oncology networks, rising interest in precision medicine, and increasing collaboration with global vendors.

The Latin America market size is set to reach a valuation of USD 0.34 billion in 2026. Whereas, the GCC market for AI in pharma and biotech in 2026 is estimated at around USD 0.05 billion, accounting for roughly 0.5% of global revenues.

COMPETITIVE LANDSCAPE

Key Industry Players

Platformization, Workflow Embedding, and Compute Partnerships to Strengthen Market Share

The global market is semi-consolidated in structure. The market growth structure is not influenced by any single organization. The prominent players include Insilico Medicine, Recursion, and IBM, among others. These companies are emphasizing on collaboration with pharmaceutical companies and mergers & acquisitions to maintain their market positions.

• For instance, in November 2023, Boehringer Ingelheim and IBM collaborated on an agreement where Boehringer used IBM’s foundation model technologies to discover novel candidate antibodies via in-silico generation and AI-enhanced screening.

Other key players in this marketspace include Atomwise Inc., BPGbio, Inc., and Cloud, among others.  Their strategies focus on increasing collaborations and partnerships.

LIST OF KEY AI IN PHARMA AND BIOTECH COMPANIES PROFILED

• Insilico Medicine (U.S.)
• Atomwise Inc. (U.S.)
• BPGbio, Inc. (U.S.)
• IBM (U.S.)
• Code Ocean (U.S.)
• Recursion (U.S.)
• Cloud (U.S.)
• ReviveMed Inc. (U.S.)
• NVIDIA Corporation (U.S.)
• Verge Genomics (U.S.)

KEY INDUSTRY DEVELOPMENTS

• December 2025: ChemLex announced a USD 45 million raise and the launch of an AI drug discovery self-driving lab in Singapore.
• September 2025: Merck KGaA and Siemens deepened their partnership to deliver AI-, data-, and automation-enabled end-to-end workflows from discovery through manufacturing.
• July 2025: Paige announced expanded use of its AI-assisted diagnostic applications with Oncoclínicas across Brazil.
• January 2025: PostEra expanded its AI drug discovery collaboration with Pfizer inc.
• November 2024: IBM highlighted a pharmaceutical tracing pilot in South Africa using Watson AI under Prosper Africa’s Tech for Trade Alliance.

REPORT COVERAGE

Request for Customization   to gain extensive market insights.

Report Scope & Segmentation