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The healthcare industry has tried for years—but to little avail—to figure out how artificial intelligence (AI) can be used to make work easier and improve patient care.
Despite the middling success healthcare has had with AI, Andreessen Horowitz (a16z), the largest venture capital firm in the US, has bet big on healthcare AI startups in the past year. The firm has invested in at least four startups and co-led three funding rounds totaling $328 million.
Investment partner Daisy Wolf and general partner Vijay Pande at a16z wrote in an August blog post that the VC firm is aware that “the AI hype cycle has hit healthcare before.” But, the two partners wrote, “we’re excited by today’s overlap of data availability, public foundation models, and widespread interest.”
A timeline of a16z investments:
- November 2022: co-led a $78 million Series A round for Rezo Therapeutics, a startup that uses AI for drug discovery.
- February 2023: invested $30 million along with other VCs, including OpenAI Startup Fund (the VC arm of the company that created ChatGPT), in Ambience Healthcare, a startup that uses AI to transcribe doctor’s notes in medical records.
- May 2023: co-led a $50 million seed round for Hippocratic AI, a startup that builds healthcare-specific large language models.
- August 2023: co-led a $200 million Series B round for Genesis Therapeutics, another startup that uses AI for drug discovery.
Pande told Bloomberg he believes this most recent wave of AI enthusiasm in healthcare is “different” because the technology has “improved significantly.” He said healthcare AI is still in its very early days and compared it to the internet in 2005, when it was starting to be used in everyday life but hadn’t yet become ubiquitous. And while Pande and Wolf expressed enthusiasm for AI’s future in healthcare, writing in the blog post that AI “will have a bigger impact in healthcare than in any other industry,” Deena Shakir, a general partner at the VC firm Lux Capital, warned that it’s still “too early” to really know how much AI will affect the healthcare industry.
Have thoughts or insights on how AI is going to change healthcare? Drop Maia a line at [email protected].