AI in Genomics and Drug Discovery Markets Projected for Substantial Growth Through 2040

The global AI in genomics market is estimated to grow from USD 1.97 billion in 2026 to USD 317.4 billion by 2040, at a CAGR of 43.75% during the forecast period. The drug discovery informatics market is estimated at USD 3.88 billion in 2025 and is expected to reach USD 11.18 billion by 2035, growing at a CAGR of 11.16% over 2026-2035.

The need to speed up drug discovery timelines, save costs, and increase success rates is driving the growing use of AI, machine learning, and big data analytics in pharmaceutical research and development. Advanced technologies like next-generation sequencing produce extensive genetic data, and AI applications such as machine learning and deep learning are proficient at forecasting disease risks, determining protein structures, analyzing gene expressions, and synthesizing multi-omics information for personalized medicine.

The use of deep learning algorithms, predictive analytics, and automated screening platforms for improved target identification and lead optimization is accelerating drug candidate selection and lowering clinical trial failure rates. AI algorithms can predict molecular interactions, optimize lead compounds, and identify potential drug candidates with higher precision. Within genomic research, AI facilitates the interpretation of complex genomic data, enabling the identification of disease-associated genes and the understanding of genetic variations influencing drug response.

The U.S. drug discovery informatics market was valued at USD 1.52 billion in 2025 and is projected to reach USD 4.35 billion by 2035, at a CAGR of 11.08% during the forecast period 2026-2035. The United States continues to lead the world in drug discovery informatics due to the presence of the world's largest biopharma ecosystem, significant federal funding in biomedical research, and a well-developed network of contract research and academic institutions. Growing FDA acceptance of in silico evidence in regulatory filings also provides strong motivation for adoption in both large pharmaceutical companies and startups.

The discovery informatics market contributed the largest revenue share of about 58.42% in 2025 due to widespread use in target identification, compound screening, and lead optimization. The biocontent management market is expected to register the fastest CAGR of approximately 11.85% in the 2026-2035 period due to the rapid expansion of biological data, the need for standardized data storage, and the need for effective knowledge management solutions.

The sequence analysis platform segment held the largest revenue share of approximately 32.16% in 2025, owing to widespread use in genomics research, biomarker discovery, and personalized medicine initiatives. The molecular modelling segment is predicted to grow at the strongest CAGR of approximately 11.94% during 2026–2035, driven by advancing computational power, improved algorithm accuracy, and increasing adoption of structure-based drug design approaches.

The rapid increase in genomic data generated by next-generation sequencing technologies has created a strong demand for AI-based tools capable of managing and analyzing complex datasets. The expanding focus on personalized medicine is another major driver, as AI supports the interpretation of individual genetic profiles to develop targeted and more effective treatment strategies. Additionally, decreasing computational costs, coupled with advancements in data processing infrastructure, have made AI technologies more accessible. Substantial investments from major technology companies and growing collaborations between pharmaceutical, biotechnology, and AI firms are further accelerating innovation in this field.