Nvidia, the renowned chip designer, has announced a $50 million investment to accelerate the training of artificial intelligence (AI) models for drug discovery at Recursion, a biotech firm. The news sent Recursion’s shares skyrocketing by approximately 83%.
Recursion, backed by AI pioneer Yoshua Bengio, will utilize its vast biological and chemical datasets, which exceed 23,000 terabytes, to train AI models on Nvidia’s cloud platform. Nvidia, recognized as a major beneficiary of the AI boom, may subsequently license these models to biotech companies through its BioNeMo generative AI cloud service for drug discovery, which was launched earlier this year.
In exchange for the investment, Recursion has sold over 7.7 million shares of its Class A common stock to Nvidia, representing a roughly 4% stake in the company. Recursion operates the Recursion OS platform, granting drug manufacturers access to the datasets necessary for designing and developing therapeutics.
This investment comes at a time when Recursion is strengthening its focus on AI. In May, the biopharma company acquired two AI-driven drug discovery firms for $87.5 million. Recursion intends to leverage Nvidia’s software to support its own pipeline as well as that of its partners. Notably, Recursion’s current partners include Bayer and Roche.
Recursion is currently conducting human trials for five of its drugs, including one in mid-stage trials to address a type of neurovascular disease caused by malformations of small blood vessels in the brain.
Abu Dhabi’s sovereign investor Mubadala and UK-based investment firm Baillie Gifford & Co. are among the prominent backers of Recursion. As a result of this news, Recursion’s shares surged to $12.40 in heavy trading volumes, potentially marking the company’s best day since its listing in 2021 if the gains hold throughout the session.
(Reporting by Chavi Mehta in Bengaluru and Stephen Nellis in San Francisco; Additional reporting by Mariam Sunny in Bengaluru; Editing by Shilpi Majumdar and Sriraj Kalluvila)