A New AMD Deal Puts It Head-to-Head With NVIDIA in AI-backed Drug Discovery

Advanced Micro Devices Inc. (AMD) is stepping up its competition with Nvidia Corp. in the rapidly evolving field of AI-driven drug discovery, announcing a new partnership and investment in the biotech startup Absci Corp. This marks AMD’s first foray into the healthcare sector, an area where Nvidia has already established a strong presence.

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Absci's stock surged over 30% in early trading Wednesday after the announcement of AMD’s $20 million investment. The funding, structured as a private investment in public equity (PIPE), aims to advance Absci’s pipeline of biologics by leveraging AMD’s high-performance computing chips and software. The collaboration is expected to lower infrastructure costs and accelerate innovation cycles in drug development.

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Absci’s CEO, Sean McClain, expressed enthusiasm for the partnership, stating, “AMD high-performance compute will enable us to further the development of next-generation antibody therapeutics. We are excited about the potential this partnership holds to accelerate the future of drug discovery.”

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Artificial intelligence is revolutionizing drug discovery, as models trained on large datasets can quickly perform complex tasks that were previously time-consuming. Nvidia, a leader in AI technology, has already made significant strides in this area. Last year, Nvidia expanded its efforts in AI-powered drug discovery by partnering with companies like Amgen Inc. and Recursion Pharmaceuticals Inc.

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Amgen’s subsidiary, deCODE Genetics, is utilizing Nvidia’s supercomputers to develop genomics “foundation models,” an initiative announced in January 2023. Meanwhile, Recursion Pharmaceuticals has adopted Nvidia’s BioNeMo platform, a generative AI tool designed to enhance drug discovery by reducing or even replacing traditional experiments.

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Absci, based in Vancouver, Washington, offers scalable wet lab technologies combined with AI capabilities, enabling the company to accelerate drug development and increase the likelihood of successful clinical trials. According to Absci, their integrated approach allows for the simultaneous optimization of multiple drug characteristics, crucial for both therapeutic benefits and development efficiency.

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“With the data to train, the AI to create, and the wet lab to validate, we can screen billions of cells per week, allowing us to go from AI-designed candidates to wet lab-validated candidates in as little as six weeks,” Absci states on its website. This streamlined process highlights the transformative potential of combining AI and biotechnology.

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AMD’s entry into the healthcare space with this investment underscores the growing importance of AI in tackling the challenges of traditional drug discovery. The conventional approach is not only time-consuming but also extremely costly. Approximately 90% of drug candidates fail during clinical trials, and successful drugs often take 10 to 15 years and $2.5 billion to reach the market. AI-driven methods promise to significantly shorten this timeline and reduce expenses.

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The competitive landscape in AI-powered drug discovery is heating up. On Wednesday, Danish pharmaceutical giant Novo Nordisk announced an expansion of its partnership with Valo Health, a private AI drug development firm. Initially valued at up to $2.7 billion, the collaboration is now worth as much as $4.6 billion. Novo Nordisk plans to make near-term payments of up to $190 million as part of the expanded deal.

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The Novo Nordisk-Valo Health partnership focuses on developing treatments for obesity, type 2 diabetes, and cardiovascular disease. This reflects the broader industry trend of leveraging AI to address some of the most pressing health challenges.

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While the recent partnership with AMD provides a boost for Absci, the company has faced challenges over the past year. Absci’s stock has declined 3% in the last 12 months, compared to a 24% gain for the S&P 500. However, the collaboration with AMD and the growing momentum of AI in drug discovery could help reverse this trend.

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Nvidia’s stronghold in the healthcare AI space remains a formidable benchmark for AMD. Nvidia has demonstrated the value of generative AI in drug discovery, particularly through partnerships like those with Amgen and Recursion. Nevertheless, AMD’s strategic entry and support for Absci underscore its commitment to carving out a presence in this lucrative and transformative market.

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In summary, AMD’s $20 million investment in Absci signals its intent to challenge Nvidia’s dominance in AI-powered drug discovery. With innovative technologies, streamlined processes, and a growing market for faster drug development, both companies are poised to shape the future of healthcare. For AMD, this marks a bold step into a high-potential sector, while Absci gains a powerful partner to further its mission of revolutionizing biologics development.

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