Generative AI and precision medicine fuel rapid growth in biotechnology sector

Hybrid modelling and simulations reduce lab testing and speed up discovery.

The global AI in biotechnology market was valued at $1.03b in 2024 and is projected to reach $1.97b by 2031, according to Valuates Reports.

The market growth is being driven by generative AI systems that can design new drug compounds, predict toxicity, and optimise efficacy before laboratory testing, allowing these tools to be integrated directly into drug discovery pipelines and reducing reliance on traditional screening methods.

AI is also advancing precision medicine by combining genomic, proteomic, imaging, and clinical data to improve patient stratification and treatment response predictions.

Clinical-stage validation of AI-designed candidates is increasing, with predictive models helping optimise trial cohorts, refine treatment outcomes, and support companion diagnostics, which in turn strengthens investor and pharmaceutical confidence.

Natural Language Processing is being used to construct biomedical knowledge graphs, accelerate target identification, monitor safety, and interpret genomic variants.

Hybrid approaches that merge physics-based molecular simulations with AI are improving candidate prioritiaation and reducing laboratory validation cycles, whilst AI applications in rare disease analytics and genomic diagnostics support earlier diagnosis, biomarker detection, and personalised treatment pathways.

Regionally, North America leads the market with a focus on AI-driven drug discovery platforms, oncology programs, and clinical-stage validation pipelines, whereas Asia-Pacific is expanding computational chemistry, sequencing analytics, and translational research through growing biotechnology investments.