AI drug discovery market seen reaching $23.95 billion by 2035

The global AI in drug discovery market is projected to grow from $3.48 billion in 2026 to $23.95 billion by 2035, driven by rising R&D costs, faster biomedical data generation and deeper pharma-AI partnerships. The forecast also points to stronger government funding, expanding clinical use and growing demand for software platforms across drug development.

Why it matters: - AI is becoming a core tool for cutting drug development costs and speeding up candidate selection. - The market’s growth reflects pressure on pharma to reduce timelines in one of the most expensive stages of R&D. - Wider use of AI in discovery could shift more work from wet labs to computational workflows.

What happened: - The global AI in Drug Discovery Market is projected to reach $23.95 billion by 2035 from $3.48 billion in 2026. - The forecast implies a 23.9% compound annual growth rate from 2026 to 2035. - The market base was estimated at $2.81 billion in 2025. - The report was released by Market Research Future on Sept. 17, 2026.

The details: - Drug development costs now average more than $2.6 billion per medicine, increasing demand for AI platforms that can lower risk and improve returns. - AI tools are being used to cut preclinical timelines by 30% to 40%. - Biomedical data is expanding through genomics, proteomics and multi-omic datasets that can train machine learning models. - Pharma and AI companies committed more than $5.8 billion in strategic partnerships between 2022 and 2024. - Pfizer, Roche and AstraZeneca have each built dedicated in-house AI labs. - Insilico Medicine advanced the first AI-designed drug into Phase II clinical trials. - Schrödinger continues to expand hybrid physics-AI discovery through LiveDesign and FEP+. - U.S. FDA data shows more than 300 AI-assisted submissions were accepted during 2023–2024. - The NIH allocated $1.8 billion to AI-related health research grants in fiscal 2024, up 34% from the prior year. - Software accounted for about 62% of market revenue in 2025. - Machine learning is the leading technology segment, with a 28.2% CAGR through 2035. - The largest application segment was target identification at 34% share in 2025. - Hit and lead generation held 27% share in 2025. - Preclinical development held 22% share in 2025. - Clinical trial optimization held 17% share in 2025. - Cloud deployment held 64% share in 2025. - North America led the market with about 42% share and roughly $1.18 billion in 2025 revenue. - Europe held about 28% of the global market. - Asia-Pacific is the fastest-growing region at a 27.4% CAGR and is projected to reach $6.21 billion by 2035. - The Middle East and Africa held about 5% of global share. - The market has medium concentration, with an estimated HHI of about 850. - The top five companies hold a combined estimated share of 28% to 35%.

Between the lines: - The forecast points to a market still early in commercialization, where platform software and partnerships matter more than scale alone. - Public funding and regulator acceptance are helping normalize AI use in drug development. - The rise of in-house pharma AI labs suggests large drugmakers want more control over data, models and IP. - Regional growth is likely to follow where governments are funding life sciences and AI infrastructure most aggressively.

What's next: - Market Research Future expects growth to continue through 2035 as AI platforms move deeper into discovery, preclinical work and trial design. - Expansion in India and China could add new demand for tailored AI-discovery platforms. - Rare disease programs and AI-as-a-service offerings for mid-tier drugmakers are emerging as next growth areas. - More partnerships between pharmaceutical companies and AI-native firms are likely as R&D costs keep rising. - Additional details are available in the full report and the sample request.