Tech giants match pharma R&D spend as AI integration accelerates

The research and development expenditure of Google parent Alphabet and Meta has reached a level comparable to that of the ten largest pharmaceutical companies by revenue. The two technology firms reported a combined R&D expense of $118.5 billion for 2025, a figure that closely mirrors the $123.7 billion spent by the leading drugmakers. This comparison includes the broader operational scopes of major pharmaceutical entities, such as Johnson & Johnson’s medical technology division and Roche’s diagnostics unit. The convergence of spending levels highlights a significant shift in the global landscape of scientific innovation, where technology companies are now rivaling traditional life sciences giants in their investment in foundational research.

The disparity in individual corporate spending has widened considerably over the past decade. In 2013, Merck and Co. and Google reported similar R&D figures, with Merck’s $7.5 billion slightly exceeding Google’s $7.1 billion. By 2025, the gap had expanded dramatically, with Alphabet spending $61.1 billion, nearly four times the $15.8 billion allocated by Merck. This trend reflects a broader industry movement where pharmaceutical companies are increasingly aligning their strategies with those of the technology sector to enhance their research capabilities. In April, Merck announced a multi-year alliance with Google Cloud, a partnership valued at up to $1 billion, underscoring the growing interdependence between these two industries.

Pharmaceutical leaders are investing heavily in advanced computing infrastructure to support artificial intelligence initiatives. Eli Lilly’s LillyPod supercomputer, constructed in collaboration with NVIDIA, became operational in Indianapolis in February following a four-month assembly period. The system now hosts NVIDIA’s Nemotron 3 Ultra model, which features approximately 550 billion parameters, allowing for on-premises processing without token or budget restrictions. According to Chief AI Officer Thomas Fuchs, a foundation model running on this system has contributed to the co-design of a small-molecule candidate with a novel chemical fragment. Additionally, Lilly and NVIDIA established a co-innovation laboratory in the San Francisco Bay Area in January, backed by up to $1 billion over five years.

Other major pharmaceutical firms are also expanding their AI capabilities. Roche announced in March that it had installed 2,176 Blackwell GPUs on its premises, bringing its total computing capacity, including cloud resources, to over 3,500 units. Bristol Myers Squibb is currently constructing its second NVIDIA supercomputer, based on Vera Rubin systems, after operating its first DGX SuperPOD for nearly three years. These investments indicate a sector-wide commitment to leveraging high-performance computing for drug discovery and development.

Frontier AI laboratories are also deepening their involvement in the pharmaceutical sector. Anthropic has established a wet laboratory in the San Francisco Bay Area for physical biology experiments, a move confirmed by its head of life sciences, Eric Kauderer-Abrams. Although a spokesperson later clarified that the lab is not exclusively dedicated to drug discovery, the company stated in June that it would run preclinical programs in disease areas considered financially unattractive by traditional drugmakers. On the same day, Anthropic partnered with Basecamp Research to utilise its EDEN biological models for antibiotic discovery and vaccine design. The company has paused clinical trials due to competition concerns. Anthropic also acquired Coefficient Bio, a New York startup founded by former Genentech computational biologists, in a stock deal valued at just over $400 million, and appointed Novartis CEO Vas Narasimhan to its board.

The integration of AI tools into pharmaceutical workflows is becoming widespread. Genmab announced in January that it would develop custom agents powered by Anthropic’s Claude for clinical development. In May, Bristol Myers Squibb began rolling out Claude Enterprise to more than 30,000 employees across research, development, manufacturing, and commercial operations. Novo Nordisk, which has signed partnerships with OpenAI and Amazon Web Services, added a joint drug-discovery collaboration with Anthropic in September. The company plans to test Claude Science, Anthropic’s research workbench, in selected R&D workflows. OpenAI launched GPT-Rosalind in April, a life sciences model available to qualified customers, with Amgen and Moderna among early users. Alphabet’s Isomorphic Labs raised $2.1 billion in May and added Johnson & Johnson to its list of research partners, which already includes Eli Lilly and Novartis. The company has delayed its goal of reaching the clinic to the end of 2026.