Artificial intelligence is the simulation of human intelligence in machines that are designed to think like humans and copy their actions. This gives potential to transform the pharmaceutical industry as well. Many pharma competitors are now investing in this technology at some level. Artificial intelligence for drug discovery is a technology that uses distinct algorithms which add value in decision-making processes for drug discovery. The implementation of AI reduces the gap of researches and development in the drug manufacturing process. For this reason, the biopharmaceutical industries are increasingly adopting AI technology to optimize the drug manufacturing process. 

The initial step in drug discovery is the process of a novel drug candidate’s identification and its therapeutic target base. Based on efficacy, potency, bioavailability, and toxicity the drug discovery or new drug target are being evaluated. Artificial intelligence is extensively used in the healthcare sector and especially used for drug discovery in order to get drugs to treat various chronic and viral diseases quicker. AI technology has the potential to recognize drug targets, and play an essential role in drug design, discovery, identification, and screening of molecules promptly and efficiently. Artificial Intelligence is expected as a lucrative healthcare industry avenue. Implementing AI helps in targeted drug manufacturing as well as helps pharmaceutical companies streamline research and development activities for customized drugs and complex drug discovery.

Another aspect of including AI in drug discovery and drug development process is leveraging the technology in understanding the patterns in the already published data to identify “trending” areas of research for different diseases that may provide insights regarding any scientific progress that may be utilized in initiating a new drug development program. This is done by using natural language processing (NLP) that helps in data mining and creating interconnected “knowledge graphs”. These knowledge graphs are essentially a threading together of the data from different areas of drug development such as disease-related data, drug-related data, or chemical/biological-entity-related data. Moreover, certain companies are involved in finding new uses of already approved drugs. Thus, the application of artificial intelligence in sifting through humongous data to create knowledge graphs and identify potential lead compounds and disease areas is another aspect driving the growth of the AI in drug discovery market in coming years.

The global Artificial Intelligence (AI) in Drug Discovery Market size was valued at US$ 253.8 million in 2019 is anticipated to reach US$ 3.93 billion by 2030, demonstrating a CAGR of 40.8 % from 2020 to 2030. AI helps in perceiving the mechanism of disease, establishing biomarkers, and generating data or models for the drug discovery process and thereby expected to propel the market over the forecast period of 2020-2030. Furthermore, rising research and development activities and software launches by the key market players are estimated to spur the market. A wave of new research and development collaborations between key biopharma players and AI-driven companies, mostly start-ups.

Furthermore, to improve the AI for the drug discovery market there is growing pressure on the drugmaker to lower the drug price. Artificial intelligence renders drug discovery more cost-effective and faster. Al lowered the failure rate of clinical trials and also eliminated the cost of long-term drug discovery research and development. However, lack of skilled professionals and infrastructure to facilitate easy AI adoption is a major factor that is expected to hamper global AI growth for the drug discovery market. Thus, in addition to limited acceptance by healthcare professionals, high costs and technological limitations of AI decision-making will impede market development.

On the basis of offering type, AI is segmented into software and services in the drug discovery market. The growth of the software segment is driven by factors such as lower cost and time to market the drug, low failure rate, a large number of drug discovery software developers, and strong software demand among big pharmaceutical & biotech companies and research institutes.

Based on the application, the drug discovery market for artificial intelligence is segmented into neurodegenerative diseases, immuno-oncology, cardiovascular disease, metabolic diseases, and other uses. Neurodegenerative diseases form the fastest-growing segment of the application, with the highest CAGR during the forecast period. AI's ability to discover medicines for complex diseases, and market players' focus on offering AI-based neurological disease platforms, is responsible for this application segment's rapid growth.

In 2019, North America held the largest share of AI in the drug discovery market and was fastest-growing drug discovery market for AI. The US, Canada, and Mexico form the largest drug discovery market for AI. In drug discovery and development these countries were early adopters of AI technology. In the North American market, the US is a major contributor. In addition, leading suppliers of AI technology, such as IBM, Google, Microsoft, NVIDIA, and Intel, are headquartered in the US, their eminent presence is a significant contributor to business growth. Other drivers include the well-established pharmaceutical industry, a strong emphasis on R&D & extensive investment, and the existence of globally prominent pharmaceutical companies. These are a few major factors that are responsible for the large share and high growth rate of this market. Europe is expected to show growth at a remarkable CAGR in the forecast period of 2020-2030. It holds the second-largest market share.

The Asia Pacific region is expected to develop at the highest CAGR of 51.68% over the forecast period, due to perpetual technological advancements in the pharmaceutical sector and the rising number of pharmaceutical manufacturers in developing countries of APAC such as China and India. The initiative of the Indian Government 'Pharma Vision 2020' has a goal for making India a leading hub for drug discovery.