Medical Chatbots Are the Latest AI Investment Trend

Key Takeaways

• Medical chatbots cater to the specific needs of healthcare professionals.
• Big Teh AI firms and startups are developing new LLM-based healthcare platforms.
• Startups working on the technology have benefited from a wave of investment in medical AI solutions.

Spurred by a surge of innovation in the sector, funding for startups developing AI healthcare tools is booming.

Of course, predictive and analytic machine learning solutions have long been a staple of MedTech venture capital (VC) firms.

However, with the advent of GPT-style large language models (LLMs), medical chatbots are increasingly attracting attention. 

Chatbots in Healthcare

With as many as one in five doctors reporting that they have used chatbots at work, some healthcare providers have moved to ban popular platforms  like ChatGPT, citing concerns over patient confidentiality.

However, there are many chatbot solutions tailored specifically for the medical industry. 

Unlike patient-facing AI doctor platforms, medical chatbots help physicians with tasks like writing notes, filling insurance documents, and diagnosing illnesses.

Common features include enhanced privacy, integration with electronic health records (EHR), and the ability to process specialized medical knowledge.

Big Tech Medical Bots

Providers of the nascent technology have typically emerged from two camps: Big Tech AI firms and smaller MedTech startups.

On the Big Tech side, Google was among the first to enter the space in 2022, introducing MedPaLM, the first LLM developed exclusively for the medical field. 

Other companies soon followed suit. In 2023, Oracle unveiled a new clinical digital assistant that integrates with its popular EHR solutions.

In October 2024, Microsoft released  its own take on the technology, Azure Health Bot, which lets health providers build custom medical agents from a suite of LLMs.

VCs Back Medical Scribe Startups

As medical chatbot platforms gain popularity, investors are taking note.

A favorite technology among VCs has been so-called “AI medical scribes”–agents designed to transcribe and summarize doctor’s notes from voice inputs.

Noteworthy startups working on the technology include Suki and Abridge AI, which have raised tens of millions of dollars each to fund the development of their respective platforms.

At its most recent funding round this month, Suki was reportedly valued  at around $500 million. In comparison, Abridge AI is reported to be  in the process of raising additional capital at a significant $2.5 billion valuation.

These chatbots are evolving from simple auto-transcribers into more sophisticated platforms that can integrate into various medical workflows. They pull data from patient records and make key information more accessible to doctors when they need it.

MedTech Startups Ride AI Investment Boom 

Aside from the latest generation of LLM-powered clinical tools, other types of medical AI remain attractive to investors.

Arguably the first machine learning use case to prove its worth in the space was drug discovery, which has been augmented by powerful AI tools for at least the last two decades. But new solutions continue to emerge all the time, propelled along by a steady stream of VC dollars.

For instance, Phare Bio recently secured $27 million to use AI to develop new antibiotics and tackle antimicrobial resistance.

Meanwhile, on Tuesday, Oct. 15, Antiverse announced that it had raised an additional $4.6 million to help fund its AI-powered antibody design platform.

Startups developing computer vision tools for the healthcare sector have also caught the attention of established MedTech firms. For instance, leading X-ray company Nanox recently acquired Quantib. Similarly, Samsung Medison reportedly paid  €86 million ($93 million) for the ultrasound analysis platform Sonio.