How do Apple, Google, and Microsoft engage in healthcare? An article to understand the healthcare layout of global technology giants
2024-08-13
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In June this year, the US data think tank CB Insights released a research report that reviewed the layout of technology giants such as Amazon, Google, Microsoft, and Nvidia in the medical field in recent years.
Judging from the acquisitions, collaborations, licensing agreements and investments between companies, from January 1, 2021 to May 21, 2024, Nvidia reached more than 801 collaborations, Google reached more than 352 collaborations, Amazon reached more than 222 collaborations, and Microsoft reached more than 100 collaborations.
In terms of input or investment, Nvidia's direct and indirect revenue in the healthcare industry has exceeded $1 billion, and may reach tens of billions of dollars in the future. In 2022, Microsoft spent $19.7 billion to acquire the intelligent voice company Nuance, and most hospitals and doctors in the United States are using Nuance technology. In addition, technology giants such as Apple, Amazon, and Google have invested at least billions of dollars in the medical field in recent years.
Companies that have created countless legends in the fields of technology and the Internet in the past three decades are trying to use their expertise in cloud, AI, and hardware development to change the medical field. Technology giants have penetrated into the medical industry through strategic investments, partnerships, and product research and development to occupy this new market high ground.
In 2022, the United States' overall medical expenditure reached 4.46 trillion U.S. dollars, accounting for 17.3% of GDP, providing 11% of jobs in the United States, and the market potential is huge.
In addition to the actively deployed US technology companies, SoftBank Group has also been attracted to the medical market and has invested in a number of healthcare companies in recent years. In June this year, SoftBank and Tempus AI, an American artificial intelligence precision medicine company, jointly established a joint venture company Pegasos in Japan to provide clinical sequencing, patient data management and medical services based on actual data. According to media reports recently, SoftBank has invested another $10 billion in AI-related projects.
For technology giants, the medical industry is a huge market to be explored, full of opportunities and challenges. The giants who have competed in the Internet and IT fields for many years are unwilling to fall behind in the new arena.
"Health News Consulting" has taken stock of the medical business layout and recent new developments of five technology companies, including Nvidia, Google, Amazon, Microsoft, and Apple, in recent years to follow up on their layout and dynamics in the medical field.
Nvidia: A big bet on AI+medical care
On June 28, Nvidia CEO Jensen Huang conducted an interview with Chris Gibson, co-founder and CEO of US biotechnology company Recursion, to discuss Nvidia’s positioning in the healthcare field.
Huang Renxun pointed out in the interview that Nvidia's goal is to support and empower other companies and researchers to promote the development of the healthcare industry by providing advanced technologies, especially in drug discovery and personalized medicine.
Recursion is one of the many AI pharmaceutical companies invested by Nvidia. In 2023, Nvidia made a big move in the field of AI pharmaceuticals, investing in 10 AI pharmaceutical companies within a year, with the highest investment amount reaching US$273 million. Huang Renxun has pointed out more than once that "AI+Pharmaceuticals" will become the next "golden track".
AI pharmaceutical manufacturing is just one of the many areas where Nvidia is entering the medical field. Looking at Nvidia's investment events since 2023, in addition to AI pharmaceutical manufacturing, which accounts for the largest proportion, there are also investments in surgical robots, medical imaging, health management platforms and other areas.
In the cold winter when the frequency of medical and health investment has dropped sharply and investment institutions have withdrawn their investments, NVIDIA is making great strides, continuously improving its own technology ecosystem through investment and expanding its business territory in the medical field.
As a supplier of basic hardware equipment, NVIDIA must continue to explore more downstream industries that require continuous strong computing power support in order to support their upstream business volume. In the field of AI+medical care, many scenarios are worth exploring. As NVIDIA's penetration rate in the industry continues to increase, a huge market worth billions or even tens of billions of dollars will be opened up in the future.
Take Nvidia's investment in Recursion as an example. At that time, the cooperation between the two companies was announced together with the investment news: Recursion plans to use Nvidia's massive proprietary biological and chemical data sets (more than 23PB and 3 trillion searchable gene and compound relationships) to accelerate the training of basic models on the NVIDIA DGX cloud for possible commercial licensing/release on Nvidia's cloud service BioNeMo.
The money that Nvidia invested in Recursion went around and came back to it in the form of data charges and service fees.
At the same time, NVIDIA is also constantly expanding its service content in the medical field. In addition to the previously launched open source artificial intelligence drug discovery tool application store BioNemo and medical equipment artificial intelligence computing platform NVIDIA Clara™ Holoscan, at the NVIDIA 2024GTC conference held in March this year, NVIDIA launched 25 medical scenario microservices (NIMs), covering drug discovery, medical technology (MedTech) and digital health and other fields.
The layout of NVIDIA's smart hospital technology platform is gradually taking shape. Products such as AI-assisted diagnostic imaging, AI robot minimally invasive surgery, and patient home monitoring software and equipment have been integrated into it. It has also invested in an AI hospital Artisight.
Kimberly Powell, vice president of Nvidia Healthcare, pointed out at Nvidia's 2024GTC conference that there are significant growth opportunities in the three fields of drug discovery, medical technology, and next-generation digital health. Currently, Nvidia's direct and indirect revenue in the healthcare industry has exceeded $1 billion, and may reach tens of billions of dollars in the future. Many leading companies in the healthcare field, such as Novo Nordisk, Johnson & Johnson Medical, and GE Healthcare, are using Nvidia's AI services.
In the conversation with Recursion in June, Huang Renxun talked about Nvidia's overall strategy for healthcare and said: "Nvidia does not have nor seek to have expertise in a specific field, but can be an excellent partner for companies in that specific field." As Huang Renxun said, Nvidia is being favored by more and more medical companies.
Google: After several setbacks in its medical business, it is exploring the "penicillin" in the field of AI health
At the HLTH Europe 2024 conference held in June this year, Google Chief Health Officer Karen DeSalvo shared with reporters Google's latest layout - developing digital platforms, establishing partnerships with medical service providers, and promoting disease prevention. Among them, generative artificial intelligence (AI) models are a key part of this work.
DeSalvo told the conference that while innovative technologies offer hope, “I don’t want people to think that just by building a generative AI model, we’re going to cure all health problems and diseases.” Generative AI models are just one of many tools.
Google is one of the earliest technology companies to make medical arrangements. As early as 2006, it established the Google Health Department, which was originally aimed at providing personal health record services to connect doctors, hospitals and pharmacies. Because market expansion did not meet expectations, the project was discontinued in 2012.
In 2018, Google re-established its health division, Google Health, which integrated the medical sectors of its search, cloud, Google Brain and other businesses, the health division of DeepMind, and the Steamers team into Google Health. In addition, it also integrated Calico's anti-aging technology. David Feinberg was appointed CEO to oversee the reorganization.
When Karen DeSalvo joined Google as Chief Health Officer in 2019, she reported to David Feinberg. However, just three years later, David Feinberg left and Google Health was disbanded again.
After Google Health was disbanded for the second time, Google's layout in the medical and health field continued.
On the one hand, Google has bet on biotechnology through its venture capital arm Google Ventures (GV), and has invested in companies such as Jingtai Technology, LifeMine Therapeutics, and Seismic Therapeutic, covering drug discovery, clinical research, health management and many other areas to expand the company's influence in the medical field.
On the other hand, Google has launched a number of generative AI products for medical scenarios, including generative AI electronic health record (EHR) documents, medical contract management, radiology AI image enhancement, gene therapy, inpatient monitoring and other scenarios.
In the medical field, Google's cloud platform carries a very core task. Google has established an independent supplier ecosystem on its cloud platform. The above-mentioned generative AI products are launched on this basis to provide medical and health-related services to governments, medical systems and scientists.
In addition, Google's search engine, YouTube and other C-end products also provide medical and health information popularization for individual users. According to Dr. Michael Howell, Google's Chief Clinical Officer, billions of people watch health videos on the YouTube channel every year.
Entering 2024, Google's healthcare business has made many new progress. In April, it reached a cooperation with Bayer to develop medical imaging AI software products using Google's generative AI and other technologies; in May, it launched the protein structure prediction model AlphaFold 3 and the multimodal medical model Med-Gemini; recently, Google fine-tuned the large language model PH-LLM dedicated to personal health based on the Gemini model to provide medical consulting services for individual users.
Karen DeSalvo once said that AI in the health field could change medical conditions globally like the discovery of penicillin in 1928.
In order to enter the medical and health field, Google has adjusted its strategic direction many times in the past two decades, invested billions of dollars, and spanned many directions, but it still faces fierce competition.
Previously, Google had created blood sugar sensing contact lenses, cancer detection pills, Google Glass for surgery, and a series of projects that have now entered the "Google graveyard" (referring to projects cut by Google), but ultimately failed to succeed, which has also caused concerns in the industry about the sustainability of Google's medical projects.
Today, Google is in urgent need of a victory to break through the healthcare industry. Can AI become this sharp weapon?
Amazon: Pharmacy business growing rapidly, losses expected to narrow
On July 30, the media disclosed an internal document of Amazon, which stated that Amazon expects its healthcare business to lose $1.08 billion in 2024. Compared with the loss of $1.28 billion in 2023, this forecast figure has improved and is in line with Amazon's previous goal of reducing costs of $100 million in its medical department.
At the same time, the revenue of the healthcare business is growing rapidly. According to Amazon's forecast data in December last year, the company's overall healthcare revenue will increase by 28% to US$3.16 billion in 2024, mainly due to Amazon Pharmacy, with sales expected to reach US$1.81 billion in 2024. Neil Lindsay, senior vice president of Amazon Health Services, pointed out in the fourth quarter earnings conference call last year that Amazon's pharmacy business is growing very fast.
Amazon, which started out as an e-commerce company, has long been planning to enter the pharmacy business, having tried to enter the pharmaceutical e-commerce track as early as 2000. At that time, Amazon planned to expand its business into the pharmacy field by investing in the US online pharmaceutical retailer Drugstore.com, but failed due to regulatory issues, and then there was a 20-year stagnation period.
It was not until more than a decade later that Amazon entered the fields of pharmaceutical e-commerce and medical services through two important acquisitions: the acquisition of online pharmacy PillPack in 2018 and healthcare services company One Medical in 2022.
Through the acquisition of PillPack, Amazon obtained assets such as mail-order drug licenses, pharmacy software, and distribution centers in 50 states of the United States, and on this basis launched its own online pharmacy, Amazon Pharmacy, to provide users with prescription drug ordering and door-to-door delivery services.
After spending $3.9 billion to acquire One Medical, Amazon began to vigorously promote the integration of offline medical services and online Internet medical services.
At the same time, Amazon has also begun to integrate medical services with its membership system. It first launched the RxPass service for Amazon Prime members through Amazon Pharmacy, allowing Prime members to pay an additional $5 per month to receive more than 50 generic drugs for more than 80 common diseases on a regular basis free of charge. At the end of last year, One Medical's medical services were also opened to Prime members at a price of $9 per month/$99 per year, providing them with Internet consultation services.
In June this year, Amazon announced that it would merge its telemedicine platform Amazon Clinic into One Medical, making it a simplified platform under One Medical.
In the insurance business, Amazon once joined forces with JPMorgan Chase and Berkshire Hathaway to establish the health insurance company Haven, but due to problems such as a single customer base, the company declared bankruptcy due to poor management just three years later.
Continued investment in the healthcare sector has also brought cost pressure to Amazon. In 2023, Amazon's healthcare business lost $1.28 billion. According to Amazon's forecast in December 2023, its two core businesses, One Medica and Amazon Pharmacy, will continue to lose money in 2024, with losses of $506 million and $420 million respectively.
In early February 2024, Amazon launched a new round of layoffs, laying off hundreds of employees in the Amazon Pharmacy and One Medical departments.
In addition to C-end businesses such as pharmaceutical e-commerce and Internet medical consultation, Amazon Cloud also has layouts in the fields of biopharmaceuticals, gene sequencing and healthcare, and has launched solutions such as natural language processing (NLP) services and medical imaging services, forming a competitive situation with Google Cloud. Philips, the US NIH, and Chinese companies such as Hejing Technology and New Century Medical are all customers of Amazon Cloud.
As e-commerce companies, Amazon and China's Alibaba and JD.com all have similar development paths in the healthcare sector. For example, they all started from pharmaceutical e-commerce business and then expanded into Internet diagnosis and treatment business. Under the different medical service systems and social security systems in China and the United States, the Internet medical businesses of several companies have also taken different directions.
Microsoft: Focusing on cloud computing, AI and medical data integration for the B-side
At the HIMSS24 conference held in March this year, Microsoft announced a new plan: it will cooperate with 16 well-known American medical systems, including Duke Health Center, Johns Hopkins School of Medicine, and Massachusetts General Hospital, to jointly launch a plan called "TRAIN" to improve the quality and credibility of new AI functions in the healthcare field.
David Rhew, Microsoft’s global chief medical officer, said that by working together, TRAIN members aim to establish best practices for responsible AI operations, helping to improve patient outcomes and safety while fostering trust in healthcare AI.
Among the many international technology giants that have crossed over into the medical field, Microsoft is not the most well-known company. Compared with Amazon and Google, which have many C-end medical businesses, and Nvidia, which has been thriving in the field of medical investment in the past two years, Microsoft's layout is slightly low-key.
As early as 1999, Microsoft entered the medical and health field by investing in the health information website WebMD. Since then, it has successively acquired medical database software Azyxxi, health information search engine Medstory, healthcare software manufacturer Sentillion and other companies.
Entering the AI era, Microsoft launched Healthcare NExT, which is led by Peter Lee, Microsoft's senior vice president of global operations. It attempts to accelerate innovation in the medical industry through artificial intelligence and cloud computing, enable groundbreaking research and product development, and help global healthcare providers, biotechnology companies and organizations use artificial intelligence and the cloud to achieve innovation.
In this regard, Microsoft has established the general direction of leveraging the company's advantages in AI and cloud to take the lead in the industry.
But among the many plans, the most widely watched one is the acquisition of intelligent voice company Nuance in 2022 for US$19.7 billion, equivalent to more than RMB 100 billion. This was Microsoft's second largest acquisition at the time, second only to LinkedIn's US$26 billion acquisition.
Nuance once provided AI support for the iPhone's voice assistant Siri, and later turned to providing voice recognition technology support for specific markets such as healthcare. For example, it uses AI to intelligently identify conversations between doctors and patients, and then enters the data into electronic medical records to automatically create clinical records, thereby improving doctors' diagnostic efficiency.
In the year before it was acquired by Microsoft, Nuance's healthcare business grew 37%, and more than 55% of doctors, 75% of radiologists, and 77% of hospitals in the United States used Nuance technology.
Gregg Pessin, an analyst at Gartner, a U.S. consulting firm, said the acquisition gives Microsoft "an entry point into the healthcare industry and a large customer base that is already using these products."
Today, Nuance's AI solutions are used by 77% of hospitals and 10,000 healthcare organizations worldwide, covering 300 million patients each year.
Microsoft's healthcare layout has always been mainly on the B-side. In 2019, before ChatGPT was born, it reached a cooperation with the then unknown OpenAI. Since then, the transaction volume has gradually increased to hundreds of billions of US dollars.
After GPT-4 came out, Microsoft added it to Nuance's Dragon Ambient Intelligence (DAX) platform, which is currently being used in many hospitals in the United States.
With the help of the two transactions of acquiring Nuance and cooperating with OpenAI, Microsoft has successfully established a foothold in the AI+medical track and its layout is gradually accelerating.
In 2023, Microsoft reached a cooperation with Epic Systems, the largest electronic health record provider in the United States, to integrate Microsoft's generative AI technology into Epic Systems' electronic health record software. A few months later, the two parties announced that they would deepen their cooperation. Epic will integrate the DAX platform into its native Epic Hyperdrive platform and Haiku mobile application, further integrating with Microsoft cloud services.
Although there have been several large transactions on the B-side, in fact, Microsoft's overall layout in the medical and health field has tended to be cautious in recent years. Previously, Microsoft had several related projects aborted - for example, in 2017, Microsoft stopped the production of fitness wearable devices; in 2019, the online personal health record system HealthVault was shut down.
Today, Microsoft's layout in the medical field focuses on cloud computing, AI and medical data integration, and may usher in new development opportunities in the AI era.
Apple: Favoring To C, continuing to invest in wearable devices
Since the beginning of 2024, Apple's overall progress has not been smooth. iPhone sales in the Chinese market have fallen sharply, overall performance has been poor, and its market value has been overtaken by Microsoft. However, in the field of healthcare, Apple has made new progress in the first half of the year.
In June this year, a feature of Apple Watch that records irregular heartbeats was approved by the U.S. Food and Drug Administration (FDA), which announced that the feature can be used in clinical studies to assess the burden of atrial fibrillation. This feature also became the first qualified digital health product in the U.S. FDA Medical Device Development Tool (MDDT) program.
Apple, which has been competing with Microsoft for decades, has chosen a completely different path from Microsoft after entering the healthcare field. Microsoft has almost given up on the layout of wearable devices, while Apple continues to invest in the healthcare functions of personal terminals such as Apple Watch.
Ten years ago in 2014, when Apple released the first Apple Watch, it was equipped with a sensor for heart rate detection. After several product iterations, the integrated health functions have become more and more complete, and several of them have obtained medical device approval from the FDA and my country's National Medical Products Administration. According to Apple, the new products released in 2024 will also be equipped with new functions such as blood pressure monitoring and sleep apnea detection.
In addition to Apple Watch, AirPods and iPhone also have health monitoring and data collection functions, allowing users to access them in one place. Then, through integration with the electronic medical record (EMR) system, this data is seamlessly shared from Apple devices to the EMR and available for doctors to view, helping users achieve health care.
At the same time, since 2016, Apple has successively acquired a number of companies engaged in health data management, sleep monitoring equipment, etc., and has continuously deepened its layout in the direction of wearable health devices.
However, Apple's overall pace in the healthcare field has been relatively slow, and it has also encountered a personnel crisis.
Between 2019 and 2021, a large number of employees left Apple's health team, including business development director Warris Bokhari and AC Wellness head Brian Ellis. According to media reports, the reason may be the disagreement among internal employees on the direction of the company's healthcare business development.
Some members believe that Apple should pursue more ambitious medical projects for a small number of people, such as medical equipment, telemedicine, medical payments, etc. However, for many years, the Apple Health team has only focused on health and prevention functions for the majority of users.
After this personnel turmoil, Apple began to explore projects for a small number of people as expected by employees. It first revealed that it would launch a health insurance business in 2024, and then released a new medical product, Apple Vision Pro, which can help doctors view holographic human body images after being equipped with Siemens programs. Since the beginning of this year, two hospitals in China, Jilin University Third Hospital and Peking University People's Hospital, have applied this product in clinical operations.
Although Apple entered the medical market the latest compared to other technology giants, its ambition in the field of medical health is not inferior to others. Apple CEO Tim Cook once said at a conference, "In the future, people will look back and say that Apple's greatest contribution to the world was healthcare."
(This article comes from China Business Network)
