A man wearing a mask walks past a Nvidia logo in Taipei, Taiwan.
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Chipmaker Nvidia will invest $50 million in Recursion Pharmaceuticals to speed up the development of the biotech firm’s artificial intelligence models for drug discovery, the companies said Wednesday.
Recursion’s stock soared 80% following the announcement. Shares of Nvidia, which have helped to fuel stock market gains this year amid hopes about its AI computing chips, rose more than 2%.
Recursion uses AI-powered models to identify and design new therapies, and offers those models to other drugmakers, including Roche and Bayer.
Salt Lake City, Utah-based Recursion will use its biological and chemical datasets exceeding 23,000 terabytes to train its AI models on Nvidia’s cloud platform. AI models usually require vast amounts of data, typically measured in terabytes, to train them.
Nvidia can then potentially license those AI models on BioNeMo, the company’s cloud service for generative AI in drug discovery that it rolled out earlier this year.
Recursion expects to use BioNeMo to support its internal drug pipeline and those of its current and future partners. Recursion is conducting human trials for five of its drugs.
“Our collaboration with NVIDIA represents two best-in-class companies coming together to help solve one of the world’s most difficult challenges, drug discovery,” Recursion CEO Chris Gibson said in the release.
Nvidia’s investment is the latest example of the AI frenzy making its way into the pharmaceutical industry. Drugmakers are increasingly recognizing AI’s potential to get life-saving treatments to people faster.
Moderna said in April that it will harness the power of AI to advance the company’s messenger RNA technology, which is used in Covid vaccines. A month later, Google Cloud launched two new AI-powered tools that aim to help biotech and pharmaceutical companies accelerate drug discovery.
Nvidia, which produces chips used to power artificial intelligence, is seen as a big winner in the AI boom.
The company reached a trillion-dollar market value for the first time in June, part of the more than 200% increase in the stock’s price since the beginning of this year on the back of heavy demand for AI.
The investment in Recursion only deepens Nvidia’s bet in the popular technology.
The announcement also comes as Recursion strengthens its focus on AI. The company in May acquired two companies in the AI-driven drug discovery space for $87.5 million.
Other AI-driven drugmakers also traded higher on Wednesday following the announcement.
Exscientia soared as much as 12%, while AbCellera Biologics jumped more than 13%.
– CNBC’s Benjamin Taubman contributed to this report.
