A masked man walks past the Nvidia logo in Taipei, Taiwan.
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Chip maker Nvidia will invest $50 million in Recursion Pharmaceuticals to accelerate the development of biotech companies’ artificial intelligence models for drug discovery, the two companies said Wednesday.
Shares of Recursion surged 80% following the announcement. Nvidia shares rose more than 2% after helping the stock market rally this year on hopes of AI computing chips.
Recursion uses AI-powered models to identify and design new therapies and provides those models to other pharmaceutical companies such as Roche and Bayer.
Based in Salt Lake City, Utah, Recursion uses over 23,000 terabytes of biological and chemical datasets to train AI models on Nvidia’s cloud platform. Training AI models typically requires huge amounts of data, measured in terabytes.
Nvidia could potentially license these AI models in BioNeMo, its cloud service for generative AI in drug discovery that it rolled out earlier this year.
Recursion expects to use BioNeMo to support its own drug pipeline and that of current and future partners. Recursion is conducting human trials on five of its drugs.
“Our partnership with NVIDIA represents two best-in-class companies working together to help solve one of the world’s toughest challenges: drug discovery,” said Chris Gibson, CEO of Recursion. said in the release.
Nvidia’s investment is the latest example of the AI frenzy making its way into the pharmaceutical industry. Pharmaceutical companies are increasingly recognizing AI’s potential to help people get life-saving treatments faster.
Moderna announced in April that it would use the power of AI to advance its messenger RNA technology, which is used in the COVID-19 vaccine. A month after that, Google Cloud released two of his new AI-powered tools aimed at helping biotech and pharmaceutical companies accelerate drug discovery.
Nvidia, which makes chips used to power artificial intelligence, is seen as a big winner in the AI boom.
The company hit a $1 trillion market cap for the first time in June, part of a more than 200% surge in its stock since the beginning of the year on strong demand for AI.
The investment in Recursion only deepens Nvidia’s bet on the popular technology.
The announcement comes as Recursion ramps up its focus on AI. The company acquired two companies in the AI-driven drug discovery space for $87.5 million in May.
Other AI-driven pharma companies also rose on Wednesday following the announcement.
Exsiencia jumped up to 12%, while Absela Biologics jumped more than 13%.
– CNBC’s Benjamin Taubman contributed to this report.
