AMD Invests $20 Million in Absci to Expand AI Chip Sales in the Healthcare Sector - WSJ

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AMD Invests $20 Million in Absci to Expand AI Chip Sales in the Healthcare Sector - WSJ

Investing.com -- Advanced Micro Devices (AMD (NASDAQ:AMD)) is preparing to invest $20 million in Washington-based drug discovery firm Absci, aiming to increase the use of artificial intelligence (AI) chips in the healthcare sector, according to a report by The Wall Street Journal. The investment is structured as a private investment in a public company involving a stake in Absci, although the exact amount of the stake has not been disclosed by AMD.

Headquartered in Santa Clara, California, AMD hopes this investment and partnership will help Absci reduce hardware costs and optimize AI solutions. This marks AMD's first foray into the life sciences sector with its AI chips, a market also targeted by its competitor Nvidia. In 2023, Nvidia invested $50 million in Recursion Pharmaceuticals to enhance its AI-based drug discovery initiatives and provided the infrastructure for the project.

Mark Papermaster, AMD's technology director, noted that their partnership with Absci represents the first effort to offer graphics processing units (GPUs) to specific industries. Investing in companies like Absci is part of AMD's strategy to make advancements in the currently Nvidia-dominated GPU market. In December, AMD participated in a $333 million funding round for cloud company Vultr with the aim of becoming the preferred AI hardware provider.

As a result of AMD's investment, according to Absci's founder and CEO Sean McClain, there will be increased utilization of AMD's GPUs. Currently, Absci uses over 470 AI chips, the majority of which are Nvidia's. The company plans to start transitioning some of its AI drug discovery workloads to AMD's GPUs.

McClain explained that AI-based drug discovery requires significant computational power, which is a challenge Absci faces rapidly. This necessity partly makes AMD's partnership and investment attractive, as it offers the chance to reduce Absci's inference costs, i.e., the costs associated with using AI models.

Absci is also collaborating with AMD to create hardware and software that better serve the healthcare sector and AI-based drug discovery. With approximately 160 employees and having raised nearly $567 million in total, the company plans to use the new funding to continue developing AI models and advancing its internal drug development efforts.

The company expects to receive results from a clinical trial targeting inflammatory bowel disease in the second half of the year.