Artificial Intelligence in Drug Discovery Market by Offering (Software, Service), Application (Target Discovery, Lead Identification, Clinical Testing), Therapy Area (Oncology, Cardiology, Neurodegenerative), Deployment, End User—Global Forecast to 2032

The Artificial Intelligence in Drug Discovery Market is projected to reach $8.95 billion by 2032, at a CAGR of 27.2% from 2025 to 2032.

 Pharmaceutical companies face several challenges during drug development, including timelines, high investment in R&D, and regulatory challenges. The need for developing and manufacturing advanced therapies has increased, resulting in newer challenges such as the collection and analysis of large data, the need for qualified professionals, and data security. Artificial intelligence (AI) is the replication of human intelligence processes. The use of AI has been increasing in various sectors, especially in the pharmaceutical industry. AI is used in R&D, drug development, diagnosis, disease prevention, remote monitoring, and epidemic prediction in the pharmaceutical industry. The adoption of AI in pharmaceutical drug discovery has enabled better success rates, quicker & faster delivery processes, and access to new biology.

The growth of the AI in drug discovery market is attributed to the rising focus on reducing the turnaround time in drug discovery, growing applications of AI in drug discovery, the rising incidence of chronic diseases, and the high risk of emerging infectious diseases. The rising adoption of machine learning (ML) in drug discovery, the emergence of local and regional start-ups in AI in drug discovery, and rising investments in R&D are creating opportunities for the growth of this market.

The Rise in the Incidence of Chronic Diseases Propels the Need for Artificial Intelligence (AI) in Drug Discovery

The incidence of chronic diseases, including chronic obstructive pulmonary disease (COPD), diabetes, coronary artery disease, hepatitis, arthritis, and cancer, is rising. According to the Centers for Disease Control and Prevention (CDC) data published in December 2022, six in ten adults in the U.S. have a chronic disease. Furthermore, according to the European Commission, in 2021, over 35.2% of the people in the European Union were reported to have chronic diseases.

According to the International Diabetes Federation, in 2020, 502 million people worldwide were diagnosed with diabetes. By 2032, 23.4 million new cases of cancer are expected to develop annually. Among all cancer types, lung cancer is the most common form leading to mortality in Asia-Pacific. Apart from cancer, the prevalence of several additional diseases has also increased over the years. Thus, the high prevalence of chronic diseases is driving the development and manufacturing of advanced therapies, boosting the applications of AI in drug discovery.

Click here to: Get Free Sample Copy of this report

The Rise in the Investments for Artificial Intelligence in Drug Discovery Creates Opportunity for this Market

After significant advancements in AI, its applications in drug discovery are rising. This is indicated by the increasing investments and a rise in the number of collaborations between pharmaceutical industries and AI companies. According to Stanford University’s Institute for Human-Centered Artificial Intelligence’s (HAI) Artificial Intelligence Index, investments in AI in drug discovery reached USD 13.8 billion in 2020. In April 2021, Exscientia (U.K.), a clinical-stage pharma tech company using artificial intelligence (AI) to design patient-based drugs, completed USD 225 million Series D funding round to continue expanding its proprietary pipeline and end-to-end AI drug discovery capabilities.

Key Findings in the Global Artificial Intelligence in Drug Discovery Market study:

Based on offering, in 2025, the software segment is expected to account for the largest share of this market

In 2025, the software segment is expected to account for the largest share of the AI in drug discovery market. AI in drug discovery software is used for faster, efficient, and cost-effective drug discovery and enhanced clinical trials. Thus, the growing interest of pharmaceutical companies in developing novel therapies has increased the adoption of AI in drug discovery software.

Based on deployment mode, the cloud-based segment is projected to register the highest CAGR over the forecast period

The cloud-based segment is projected to register the highest CAGR over the forecast period. The demand for cloud-based and web-based platforms is growing due to the benefits of cloud-based models in terms of security and flexibility, high-capacity data storage, quick accessibility, and cost-effectiveness.

Based on application, in 2025, the lead compound identification segment is expected to account for the largest share of this market

In 2025, the lead compound identification segment is expected to account for the largest share of the AI in drug discovery market. The large market share of this segment is attributed to the benefits and importance of lead compound identification in drug discovery. Lead compound identification is a crucial step in drug discovery which is likely to finalize the compounds in drug discovery to reach lead compound optimization and, ultimately, to the clinical candidate development phase. Additionally, the use of AI in lead compound identification helps minimize time and cost.

Based on therapeutic area, in 2025, the oncology segment is expected to account for the largest share of this market

In 2025, the oncology segment is expected to account for the largest share of the AI in drug discovery market. Most drug discovery companies focus on oncology for the drug discovery process. The high prevalence of cancer and the availability of funding for oncology research are the factors contributing to the large market share of this segment. Furthermore, a large number of collaborations between pharmaceutical companies and AI companies is also contributing to this segment’s large market share.

Based on end user, in 2025, the pharmaceutical & biotechnological companies segment is expected to account for the largest share of this market

Pharmaceutical and biopharmaceutical companies are employing AI to find new drugs. These companies focus on reducing operating costs associated with the production of drugs and accelerating the introduction of new treatments to the market. Pharmaceutical companies are under pressure to find new drugs due to the rising burden of chronic and infectious diseases. Thus, pharmaceutical and biopharmaceutical companies are integrating AI into drug research to speed up drug discovery while reducing costs and time to market.

Asia-Pacific: Fastest growing regional market

The emerging infrastructure for AI and pharmaceutical research in countries such as China, India, Singapore, and South Korea, rising funding for cancer research, and growing investments in AI are driving the growth of the AI in drug discovery market in Asia-Paicifc. Furthermore, the growing number of AI-based drug discovery startups is also boosting the growth of this market.

Key Players

The report includes a competitive landscape based on an extensive assessment of the key strategic developments adopted by key market players over the past few years. The key players profiled in the global AI in drug discovery market report are Microsoft Corporation (U.S.), Exscientia plc (U.K.), NVIDIA Corporation (U.S.), Schrödinger, LLC (U.S.), Atomwise, Inc. (U.S.), BenevolentAI Limited (U.K.), Deep Genomics Incorporated (Canada), InSilico Medicine (U.S.), Cloud Pharmaceuticals, Inc. (U.S.), and Standigm Inc. (South Korea).

Scope of the Report

Artificial Intelligence in Drug Discovery Market, by Offering

• Software
• Services

Artificial Intelligence in Drug Discovery Market, by Deployment Mode

• On-premises
• Cloud & Web-Based Mode

Artificial Intelligence in Drug Discovery Market, by Application

• Target Discovery & Validation
• Lead Compound Identification
• De Novo Design and Drug Optimization
• Preclinical & Clinical Testing

Artificial Intelligence in Drug Discovery Market, by Therapeutic Area

• Oncology
• Neurodegenerative Diseases
• Cardiovascular Diseases
• Metabolic Diseases
• Other Therapeutic Areas
  (Note: Other therapeutic areas include infectious diseases and rare diseases.)

Artificial Intelligence in Drug Discovery Market, by End User

• Pharmaceutical & Biopharmaceutical Companies
• Contract Research Organizations (CROs)
• Academic & Research Institutes

Artificial Intelligence in Drug Discovery Market, by Geography

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
  • Rest of Europe (RoE)
• Asia-Pacific
  • China
  • Japan
  • India
  • Rest of APAC (RoAPAC)
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America (RoLA)
• Middle East & Africa

Key questions answered in the report: